Retaining capital gains history when transferring shares

[Exspextations]

I have transferred part of the shares of one of my investments to my wife. This was a zero cost transfer, but for tax purposes I need to carry over the associated capital gains history for the transferred shares to my wife's portfolio.

I tried using the Transfer out and Transfer in options, but this looses the capital gains history in my wife's portfolio. So what is the correct way to do this in Fund Manager?

[Mark]

Hi Exspextations,

If you have more than one lot, use the "Transfer Between" wizard. This will record 1 transfer out, plus 1 transfer in transaction for each lot transferred, so you maintain your taxable cost basis. If you only transferred shares from a single lot you can just record the transfer out and 1 transfer in yourself, or still use the Transfer Between wizard. Notice when you record a Transfer In you can record the tax cost basis date/value separate from the transfer date/value.

[Exspextations]

Hi Mark, Thank you for the tip. Took a bit of searching to find the 'Transfer Between' option but it is clear how to do the transfer. The only question I have is which accounting method I should use - presumably with many lots over several years I should use the 'Spec lot' option to ensure gains are recorded correctly or is is the FIFO method?

[Mark]

Hello Exspextations,

If you've ever sold any of the shares in this "Source" investment before, what did you use for the accounting method when determining which shares were sold, and the gains? Choose that accounting method in this dialog. If you have never sold shares, it doesn't matter. If you choose the "Help" button in the Transfer Between dialog it explains more about what that accounting method option does:

The accounting method to use when determining which shares are transferred from the "Source" investment. The accounting method determines which shares have already been sold. Un-sold shares are transferred out using a first in first out method. The transferred out shares determine the tax cost basis value and date and also the out of pocket (OOP) cost for the transferred in shares. The total transferred out tax and OOP basis is equal to the total transferred in tax and OOP basis.