Re: Unit Investment Trusts
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Posted by Mark on June 25, 1999 at 18:58:29:
In Reply to: Re: Unit Investment Trusts posted by Dennis Kowallek on June 25, 1999 at 12:33:01:
: : I am not familiar with "in-kind" rollovers, so please explain. : O.K. Here goes... : Let's say I invest $10,000 in a Dogs-of-the-Dow Unit Trust (10,000 shares at
: $1.00 each) on 1/1/98 (call this Series 98-1). Come 1/1/99, it's time to roll
: into the next series (99-1). To keep things simple, let's say the investment
: has appreciated in value to $11,000 ($1.10 per share), with each of the 10
: stocks in the trust contributing equally to the $1000 gain. : Let's say for Series 99-1, 8 of the Dogs are the same as Series 98-1. : With a "standard" rollover, your entire 98-1 position would be sold and all
: new shares in the 99-1 position would be purchased (11,000 shares at $1.00
: each). You would realize a $1000 cap gain in this case, and the 99-1 basis
: would be $11,000. : With an "in-kind" rollover, the trust, through some accounting wizardry, would
: treat your rollover as if only the stocks which are no longer Dogs were sold.
: In this case, you would only realize a $200 capital gain (but your 99-1 basis
: would be $10,200). You would still end up with 11,000 shares at $1.00 each. : I hope this explanation is somewhat clear. : Dennis
Hi Dennis,
The details of how to record this are probably the same as however the
accounting works... If you only sell some of your original purchase, do
the same in FM. Through whatever combinations of sells/buys you really
go through to end up with the 11,000 shares at 1.00 each, you should enter
just the same information. From your description it isn't quite clear to
me how you get there though...
Thanks,
Mark
--
Mark Beiley
Fund Manager for Windows 3.1x/95/98/NT
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