How do *you* use investment categories?

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TRudolph

26 Feb, 2021 03:51 PM

This (tax year 2020) will be my first full year using Moneydance. For years, when using Quicken, I used 'Uncategorized' reports to generate a list of transactions for which my wife needed to assign a category. When I set up MD, I did not indicate a category for my investment transactions (I assumed the type of transaction was sufficient). Now my 'uncategorized' report is filled with investment transactions.

I realize now that I should have and need to generate(d) 'categories' for each type of investment transaction and that I should do it now while I only have 1 year of transactions to update. Before I assume I know how to best make use of this option (I can see things like STCG, LTCG, etc., but not sure what to put in categorically for Buy or Sell, etc.), I thought I'd turn to the more learned and experienced MD masters for advice. Anyone have any suggestions about what 'categories' to assign to the various investment transactions to make them useful at year's end?

Many thanks in advance for your forthcoming suggestions!

  1. 1 Posted by dwg on 26 Feb, 2021 08:31 PM

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    I'm a fellow user.

    For transaction like buys and sells you cannot assign a category, the software does not allow it, you can assign a category to any fees but that is all. This makes sense as you are buying or selling what is effectively an asset

    For things like Div, MiscInc, MisExp you assign a suitable category to the transaction based on what it actually is. It could be many thing, Dividend, Interest, Capital gain, expense etc

    For taxation use you would typically use an Income and expense report either selecting appropriate categories or by having set categories as tax related then just selecting that checkbox in the report parameters.

    Any transaction report should be considered as just a dump of transactions, there are provisions in some for sub-totalling, but I would not be looking to those reports for Taxation reporting.

  2. 2 Posted by TRudolph on 26 Feb, 2021 11:12 PM

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    >>Insert headship noise here.<<
    Thanks, DWG. I was wondering. I looked at the 'Uncategorized' filter last night and noticed all the uncategorized transactions in the investment accounts, but there was no transaction type (in that particular report). When I opened an investment register before submitting the question I noticed the category heading and when I selected a buy transaction the 'uncategorized' was displayed in several fields. I notice now that some are a different color (hard for me to perceive as I am color blind). When I tab through one of the 'Buy' transactions, indeed, MD does not allow any entry in the category. The default display of Uncategorized threw me.

    That being realized, I will have no problem coming up with categories that will be helpful and work on my balance sheet.

    Thanks again for your prompt and thoughtful reply.

    (After preparing for this tax season by regenerating all of my standard reports in Moneydance, I can say I am a pretty happy former Quicken user. Kudos to IK. Thanks.)

  3. 3 Posted by dwg on 27 Feb, 2021 12:07 AM

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    In investment registers you will see all the headings and all the fields, however the "action" determines what fields are actually active and available. Some fields will appear to have values in them but these will be in a light grey colour and this means they are nothing more than placeholder values and are not used. personally I think they should be invisible.

  4. 4 Posted by TRudolph on 27 Feb, 2021 12:24 AM

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    I wholeheartedly concur. Why have 'Uncategorized' in so many fields if they are not pertinent? Perhaps make them invisible or use 'Blank' if they need a placeholder.

    Thanks for straightening me out.

    Cheers.

  5. TRudolph closed this discussion on 27 Feb, 2021 03:13 AM.

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