Investment anomalies?
Jeff Barlow
jeff at wb6csv.net
Tue Jan 19 02:41:04 UTC 2016
On 01/18/2016 05:25 PM, Jack wrote:
> Two separate issues. First, I'm not sure we're using the same
> terminology. They pay a dividend, which needs an assigned income
> category, so it can be properly allocated for tax reasons. Most
> commonly, all of that amount is used to buy shares, so some number of
> shares get added to the holdings, and there is no cash to be transferred
> to a brokerage account.
Hello, I don't mean to hijack your thread but I have some closely
related issues. First let me concur that the category amount on a
reinvested dividend sould never be zero. If it was then there is no
transaction to record. As Jack says it's exactly a dividend and a buy
rolled into one. The dividend is income and must be accounted for as such.
I receive dividends from several mutual funds. Some are reinvested in
shares of the same fund. Some are used to buy shares in a different fund
from the same institution (The Vanguard Group). Some are paid as a cash
transfer to my checking account (an ACH transfer). No broker is
involved. There is no actual brokerage account. Vanguard does not allow
cash accounts. Most of these transactions represent taxable income and
need to categorized as such even though many involve no cash flow.
The only way I've found to record all these transactions in KMM is to
employ a fictional brokerage account within KMM. I have to record these
single transactions as two separate transactions into and out of this
fictional brokerage account.
Since this fictional brokerage account does not indeed exist in the real
world one would at least expect it to maintain a zero balance. Alas, due
to KMM rounding errors that is not even true.
I am currently waiting to fill out my income tax returns until I receive
statements (1099s) from Vanguard because the numbers I get from KMM
never quite match reality.
--
Later,
Jeff
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