Capital Gain Schedule

[paulstonge]

Below is an abbreviated section copied from of the cap gain sched. Notice that even though the report says some shs were bot as late as 3/20/08, all of the shs were given long term (one yr or more) treatment. What am I missing?

1/1/2008 - 9/8/2008

Investment Shares Bought Sold Term Sell Value Cost Basis Gain/Loss
WASHINGTON 0.552 6/23/06 - 3/20/08 5/15/08 Long 18.00 18.87 -0.87

[Mark]

Hi paulstonge,

If you look under "Options / Report Preferences... / Capital Gains" do you have "Long Term" defined as 1 year? If so, can you email me this investment file, and I'll see if I can reproduce the problem.

[paulstonge]

This was done using ave cost.

Does the algorithim look at all shs to determine the total cost and as the shs are sold, the longest held shs are sold first even though the cost for those shares is the ave cost of all shs?

[paulstonge]

I see it now. When using ave cost, the algorithim sells the oldest shs first and pro-rates the ave cost of all of the shs (even those that are short term at the time of sale) to the shs considered sold. In other words it sells the shs on a FIFO basis and it allocates the dollar cost on an ave basis.

[Mark]

Hi paulstonge,

Perfectly stated... This is indeed how the average cost accounting method works.