Imputation credits

[rsw]

Mark - I know people have raised this issue in the dim distant past, but it doesn't pop up on searching. It is peculiar to Australia & NZ, I think. Companies pay dividends with a tax credit attached, and you need to keep track of these credits. I have used a clunky method of labelling them in "Memo" field on distributions, then reading a transaction report into Excel where I search for the label. There must be a better way. Can I do something like this: pay two dividends, one of which is the imputation credit, which goes into an alternative cash account? But how do I direct that credit into the desired alternative cash account? Any suggestions welcome. Ronald

[Mark]

Hi Ronald,

You can record it as two separate distributions. You may want to customize the labels, and call one of the "User Defined" distribution types "Imputation" or something. You do this under "Options / Distribution Labels...". This way, you can keep the amounts separate, and easily reportable.

Every sub-portfolio can have only one default cash account, but you could manually move the money into a separate cash account if you wanted. If your goal is to simply keep track of this amount, just recording it as a separate distribution type would allow you to do this. It would not be necessary to keep the cash separate.

Also, if you click on the "Site Map" link on the bottom of any page on our site, there is a "Search" page, where you can search the whole site, including this forum, using Google. It works better than the built-in search feature of this forum. For example, you can search for "franking credit". It has been discussed a fair amount on the forum.

[rsw]

Many thanks, Mark. Very helpful , as always.
Ronald

[rsw]

Mark: As an addendum: I followed your advice and created an investment called "Imputation". Each franking credit is then entered as the cash dividend is entered, but I checked the "Reinvested" box to ensure that it doesn't show up in the default cash account. I just subtract the total value of Imputation at year end from the total value of investments.

You probably thought of this....
Ronald

[Mark]

Hi Ronald,

I was previously suggesting something slightly different I believe. Instead of creating a new investment for tracking these franking credits, I was suggesting defining this as one of your "distribution" types. See "Options / Distribution Labels...". This way, if a stock pays a dividend, and part of it is a credit, record 2 distributions. One for the dividend amount, and one for the credit amount, under your previously defined "Imputation" distribution type. If you have a default cash account, both will be deposited in there. If you don't want the imputation credit going into that default cash account, you can delete that deposit, leaving only the imputation distribution in the stock. Alternatively, you could record a sell in cash to remove the franking credit distribution.

This way, you do not have to do any subtracting to get your real total value, and if you want to know how much franking credits, you can easily calculate this in a Custom report, or a Distribution Summary report.