Reinvest Interest transaction

[Jack]

On 2016.12.09 10:10, Mark Jones wrote:
> On 2016-12-08 11:04 AM, Jack wrote:
>> On 2016.12.08 08:58, aga wrote:
>>> On 08/12/16 01:00, Mark Jones wrote:
>>> > [Reposting from KDE forum since this is a question for the devs]
>>> >
>>> > Hi,
>>> >
>>> > I have just finished importing several years of Quicken data into
>>> kmymoney.
>>> > My thanks to the developers for this impressive Quicken Killer.
>>> Great job!
>>> >
>>> > As reported in bug #343256, I noticed that investment transactions
>>> of type
>>> > "ReinvInt" in the QIF file were ignored and I had to import them
>>> separately
>>> > from a CSV file. The investment income type (Dividend vs  
>>> Interest) is
>>> > treated differently for tax purposes where I live so I need to  
>>> track
>>> this
>>> > in the transaction. I downloaded the kmymoney source code and have
>>> > implemented the fix to support "ReinvInt" but I have a couple of
>>> questions
>>> > about the "Reinvest Dividend" activity.
>>> >
>>> > The "Reinvest Dividend" activity has a category selection drop  
>>> down
>>> labeled
>>> > "Interest" and I find the terminology in this dialog confusing.  
>>> To my
>>> > understanding, a security generates income of various types. The  
>>> income
>>> > type is important because it often has a tax impact for the
>>> investor. As
>>> > dividends and interest are two different income types, this  
>>> dialogue
>>> would
>>> > make more sense to me if the activity was labeled "Reinvest  
>>> income"
>>> and the
>>> > category drop down was labeled "Income Type" rather than  
>>> "Interest".
>>> Am I
>>> > missing something? What was the intent of the "Interest" category?
>>> >
>>> > Thanks in advance
>>> > Mark
>>> >
>>> 
>>> Hi Mark
>>> 
>>> I'm not sure if wires are a bit crossed here?
>>> https://bugs.kde.org/show_bug.cgi?id=343256 is, as in its Subject,
>>> specific to the KF5 version, and also specific to CSV importing  
>>> rather
>>> than QIF.
>>> 
>>> That aside, it does appear that "ReinvInt" is not, and possibly  
>>> never
>>> has been, supported.  If you wish, you could submit your patch to  
>>> our
>>> reviewboard from where it may be possible to incorporate them.  It  
>>> is
>>> most likely that this would be in the KF5 version, which has not yet
>>> been released.  I'm assuming that your requirement is for the  
>>> income to
>>> purchase further stock?
>>> 
>>> I suspect that the use of 'income' here is a generic term, used to
>>> signify that money has been earned.  The 'income' field may be  
>>> completed
>>> with, say, _IntInc, or any other suitable category type.
>>> 
>>> Allan
>> To expand on Allan's answer, I have created separate income  
>> categories
>> to use for investment transactions including (but not limited to)
>> interest
>> dividends
>> short term capital gains
>> long term capital gains
>> all four of those duplicated for tax deferred versions
>> some of those duplicated for reinvestment transactions (more for my  
>> own
>> tracking than for tax differences).
>> 
>> Also note that the label on a dropdown (such as "Interest") does not
>> necessarily imply any particular restrictions on what you can choose.
>> If the dropdown shows categories, you can generally select any
>> category.  In theory, you could also select an expense category,
>> although it wouldn't make much sense in this case.
>> 
>> Much of the terminology in KMyMoney (especially on the investment
>> screens) is perhaps somewhat simplistic, and sometimes confusing.
>> However, all developer efforts are currently aimed at completing the
>> porting to KDE Frameworks.  I suspect one of the releases following  
>> that
>> might include terminology changes.
>> 
> 
> Thanks for explaining where the developers are focused, Jack. I  
> understand how terminology would be a low priority when a major port  
> is underway.
> 
>> In my personal case, as has been discussed here (ad nauseum perhaps)  
>> for
>> a reinvestment my broker sends a dividend transaction and a separate
>> income transaction, so I always have to convert the dividend to a
>> reinvest-dividend, and then also delete the other transaction from  
>> the
>> brokerage account.  So yes, there are lots of issues surrounding
>> dividend reinvestment transactions.
>> 
>> Jack
> 
> For the moment, I don't see any showstoppers in moving my investment  
> scenarios from Quicken to kmymoney. There are still use cases where a  
> single reinvestment transaction will need to be split into multiple  
> kmymoney transactions, e.g. DRIP programs that only purchase whole  
> shares and pay the remainder in cash, payouts subject to multiple fee  
> types (admin and foreign withholding taxes), ETF payouts that are a  
> blend of different income types. However, Quicken didn't handle these  
> cleanly either. I'll be happy to contribute to improving kmymoney in  
> this area.
> 
> ./Mark
One thing I can add is that a single KMM transaction can easily handle  
multiple types of income and multiple types of expenses - use the split  
functionality where you would normally enter a single category (with  
the interest label in this case.)  I've done that myself.  I've also  
over the years handled the partial share transactions with the whole  
share only approach, but now I just track the exact number of shares  
(usually to four decimal places).  In my case, with Merrill Lynch,  
although they do use the whole share adds/deletes, they actually do  
indicate the exact number of shares.  Not sure how your broker handles  
it.

Jack