Recording certain types of transactions
Any suggestions on proper way to record Long-term gains, short-term gains, re-invested dividends?
Any difference if it is a tax deferred account (eg 401k or IRA)?
Often at year end there are DivReinvest transactions.
Do I create categories for Long-term Capital Gains, Short-term capital gains, Dividends, Interest?
For Check# a number of transactions that came over from Quicken have ReinvLg as a check #. Is this even relevant to anything or just senseless information?
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1 Posted by dwg on 31 Jan, 2023 03:19 AM
Quicken has an extensive list of actions, one of the reasons it is so long is that they not only determine how a transaction is to be processed but also force the category used. Moneydance actions do not force the category.
Yes create categories for all those items, you may want to have separate categories if some of the investment returns are tax free and some taxed.
For anything that is a return from an investment I use one of the "Div" actions (Div, DivReinvest, DivXfr) and select the appropriate category for the transaction.
2 Posted by netr@cer on 31 Jan, 2023 09:33 PM
perfect, thank you.
3 Posted by netr@cer on 01 Feb, 2023 06:18 PM
One more thing. Interest earned on cash balance, came across as Div income in the securities register. Even though I've selected interest as a category, this creates a null security because in MD it seems like Div must be tied to a security (probably as it should be).
I see two ways to handle this.
1) create a dummy security called "Investment Cash Balance" and use that as the security for the Div transaction (easiest way)
2) move the transaction to the Investment Bank Register and just record a simple transaction with the Investment house as the payee and tie it to category Interest. This would take it out of the regular register and would do a better job at year end recording, as I could generate a report of interest earned by investment house (eg Schwab, etrade, take your pick).
I suppose I could create a security called "Schwab Cash Balance" and use that as a security to get the same result, but it still leaves a simple cash transaction in the investment register.
Is there an easy way to 'move' the transaction to the bank register? I'm not seeing it, and it would require manual recreation and deletion of the original.
4 Posted by Stuart Beesley ... on 01 Feb, 2023 06:42 PM
The easy way is this..
Change the Div (income) transaction type to an Xfr transaction and put the category as the income category.. This will bring the cash into your account and it's not tied to a security... Easy (Took me years to work that one out)...
5 Posted by netr@cer on 02 Feb, 2023 08:55 PM
Brilliant! Worked like a charm.
6 Posted by Stuart Beesley ... on 02 Feb, 2023 09:28 PM
7 Posted by dwg on 04 Feb, 2023 12:21 AM
For anyone that is having trouble with this idea let me offer you another approach, I will explain what is going on her and why it works.
What is being done here is that you have something like a cash management account where the cash is held, some people set this up as a security this a fixed value of 1.00 per share, you buy and sell as usual with securities.
Some people just want to hold it in the Investment Account, rather than in a security sub account, there is no right or wrong way they are just different approaches.
In the Investment account, all actions except Xfr work with the security sub accounts. The register you see is really a combined register that shows Investment account transactions along with the transactions in each of the security sub accounts, the little register in the corner of the securities details screen is all tat you can see of the security sub register.
Ok back to the initial situation, you want to just manage the cash in the investment in the Investment Account and entering Interest as an Xfr is not making much sense to you.
Switch to the Bank Register there is a button in the highlighted bar at the top of the window.
You should see something very familiar, it looks like any other register, like a bank account or a credit card account etc.
You may have a savings account and are used to entering interest for that. In this register just enter the interest in exactly the same way, you may of course have a specific category for Investment Interest, so you use that. Looks like a standard baking type interest transaction, that because it is. So you enter it.
Switch back to the Investment register, you see an XFR transaction WHY??
Well one reason is that the only Investment action that does not involve a securities sub account is XFR.
There is a more fundamental reason though.
When I first started to study this stuff back in the middle ages - don't worry double entry accounting has its roots in about the 12th century, it has passed its beta testing, it was drummed into us that "For every debit there has to be a corresponding and equal credit"
Good gobbly gook designed to confuse the student no doubt, what is means though is that every transaction is just a transfer from one account to another. so what people think of accounts are but also things like Income and Expense categories are also "accounts"
If you like you can think of them all as registers, so if I take money from one I have to put it in another.
So the standard registers are implying an XFR with each transaction. The Investment register is spelling it out as such because that is all it can do.