In microsoft.public.money, PTH wrote:

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It works in theory. If the bug were fixed it could work in practice.

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Hi Cal,

Just a folow up on a solution to the problem:

Whenever a mutual fund reinvests a distribution (say a capital gain) without
adding units, the cost basis needs to be increased by the amount of the
reinvested distribution.

One way seems to be:

1: Enter the distribution as an income (whichever type fits the tax
category, e.g. Cap gain)
2: Enter a Negative Return of Capital for the same amount. (MONEY accepts
negative ROC) This increases the cost without changing the number of units
and MONEY seem to track ROC pretty well.

Both transactions can be handled with associated cash account.

Any pitfall I have not thought of which will trip me up later?

Appreciate your thoughts on this

cheers
PTH

In microsoft.public.money, PTH wrote:

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Do the ROC and then a Buy.

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No sells. Instead, adjust the holdings via an appropriate split.
Post the ratio you are trying to achieve (afterBuyTotal)/(OldTotal).



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Cal, thanks for the advice. The tax is Canadian, but similar to the U.S.

A few more questions:

1: For return of capital, yes I can do the ROC activity and Money will
handle the cost basis adjustment. However, since I don't really receive the
ROC; The ROC activity will increase the cash account. The only way I can
see how to handle this is to do a SELL and BUY to adjust the cost basis and
absorb the ROC.

2: For the capital gains, again since I don't really receive the Cap Gains;
the same problem in cash account will occur unless I do the same SELL and BUY
again. Since Canada does not have different tax rate for whether the cap
gains is long or short, the buy/sell would work.

Do you think the above is a good work around or do you have other
alternatives?

thanks again


"Cal Learner-- MVP" wrote:

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In microsoft.public.money, PTH wrote:

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If this is a taxable account, I expect there is more on that paper
than a balance number.

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What does your 1099 say (if this is US investment)?

You should be able to enter the activities as ReturnOfCapital and
ReinvestLTerm-CG transactions and then do an appropriate split to
bring you back to the original number of shares.

I hold mutual funds that report both capital gains and return of capital at
the end of year for tax purposes. Neither of these are actually paid out.
And they do not increase the number shares of the fund. Rather these "paper"
transactions will only be reflected by the change of the fund value.

Appreciate any advice on what is the best way to handle (enter them) in
Money 2006 so that :

1: these "paper" transactions can be tracked for tax purpose; and
2: their effect on the cost bsis and future capital gains/loss will be
correct.

Thanks

P.S. Also appreciate any information regarding lasterst version of Money
(08? 09?) which improved on Money06.