Capital Gains Report

Last modified 10:28, 4 Nov 2012

Capital Gains

The Capital Gains report lets you view the realized and unrealized profits for investments currently listed in the Portfolios and includes the period of time that each instrument has been held.

This is an important report for calculating capital gains for your portfolio and a vital assistance at tax time.

Define Scope of Report

Use the Capital Gains dialog box to define the scope of the information to be included in the report:

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Account

Select one Account , or All.

The drop-down menu includes all the Accounts created in the Portfolio Manager.

All is the default.

Instruments

Select one type of instrument from the drop-down menu(Stock, Option, Warrants Futures or Forex) or choose All.

All is the default.

Currency

Choose a currency to calculate the report in.

The default currency is set in the General tab of the Applications Settings.

Accounting Standard

When multiple transactions occurring at different times affect the same security, the Capital Gain on the transactions will differ depending on which accounting standard is applied.

There are two generally accepted methods of calculating Capital Gains: LIFO and FIFO

First In First Out - FIFO

This is the most common method and is the default setting.

It applies the price paid for the earliest purchase to the profit calculation of later sales.

For example, 50 shares of IBM are purchased in 1995 for $50 a share, later 75 shares of IBM are purchased in 2000 for $85 a share. When 25 shares of IBM are sold in 2005, FIFO will use the "first in" price as the cost basis i.e. 25 x $50 = $1,250

If the sale price in 2005 is $133 per share, the FIFO profits is $5,400:


Formula

Profit/Loss = Sale Proceeds – FIFO cost basis

$5,400 = $6,650 (50 shares x $133) – $1,250 (50 Shares x$50)

Last In First Out - LIFO

This is the most common method and is the default setting.

It applies the price paid for the earliest purchase to the profit calculation of later sales.

For example, 50 shares of IBM are purchased in 1995 for $50 a share, later 75 shares of IBM are purchased in 2000 for $85 a share. When 25 shares of IBM are sold in 2005, LIFO will use the "Last in" price as the cost basis i.e. 25 x $85 = $4,250

If the sale price in 2005 is $133 per share, the LIFO profits is $2,400:


Formula

Profit/Loss = Sale Proceeds – LIFO cost basis

$2,400 = $6,650 (50 shares x $133) – $4,250 (50 Shares x$85)

For tax purposes taxpayers usually will be required to use one method or the other. Refer to your professional tax advisor.

Note - In order for the FIFO/LIFO calculation to work, all transactions must be associated with the same trade, for more information see the Trade Allocation section of the Trades worksheet's help topic.

Trade Types

Select All or Long Trades or Short Trades.

The default setting is All.

capgaintimeframe.png

Time Frame
Menu Selection

The default selection is All Transactions, however users can select various time periods (Previous Week, Month or Year) or limit the report to a Financial Year (either Previous or from the beginning of the current financial year up to the present).

Manual Entry

Alternatively, manually enter the time-frame for the report.

Enter the start date in text box on the left and the end of the time-frame into the text box on the right. If the end date is earlier than the start date, the OK button will be disabled.

Enter the Date using the Short Date format as set for your PC. Refer to the Regional and Language Options settings located in the Windows Control Panel.

Report Summary Display

The Report's Settings are displayed in a small summary table. The listed settings give an indication of the parameters used to create the report.

The table can be displayed above or below the body of the report.

The display can also be turned off.

Other Report Options
Positions Held Less than 1 Year

In most countries, the threshold for income to be taxed at capital gains rates is reached when the assets have been held for at least 12 months.

To exclude positions that cannot meet this criteria, unselect the Include positions held less than 12 months check-box.

While 12 months is the default, the number of months can be manually altered to meet local taxation requirements.

Include Unrealized Gains

Tax on capital gains is normally not payable until the happening of some taxable event that causes the gain to loss to be "realized".

To exclude positions that do not meet this criteria, unselect the Include unrealized gains check-box.

Report Contents

The Capital Gains Report provides a single row for each transaction that resulted in a capital gain or loss:

Details of Trade

The account name, symbol and quantity identify the position.

Duration of Trade

The exact time held is stated, together with an indication of whether it was held for over a year (normally the point at which capital gain's tax treatment becomes applicable).

Calculation

The net Cost and net Proceeds are used to calculate the Realized Gain.

The calculations for the net Cost and Proceeds can be viewed in the Portfolio Details Transactions worksheet.

Totals

The Total Cost, Proceeds and Realized Gains for the selected period will be calculated.

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