Short Sell Cost Basis
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I'm having a problem with the cost basis of short sells. For example, yesterday I shorted 50 XYZ @ 94.6 for a total of -4730.00 with 10.12 in commission and FEC fees. This is the only position on XYZ I currently have open. Strangely the cost basis as reported in the portfolio view is -4595.06. The cost basis should be -4730.00 + 10.11 = -4719.88. Now, I do have buy and sell transactions on that security in the past so my guess is that the calculation is somehow mingling lots from the past. The cost basis report doesn't seem to even display short/cover lots. The capital gains report does display short sells, but the cost basis is always zero which makes it look like you made a lot of money and that of course screws up the calculation for the entire security which then propagates to the entire investment account. Am I doing something wrong?
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1
Brian Adler
on 03 Jun, 2009 03:38 AM
Brian,
You are not doing something wrong. There is a problem that we will address. By the way, my understanding is that the cost basis on a short sale should be the proceeds of the short plus commission. Then when you buy/cover, your net gain/loss is the cost basis minus the purchase price.
I can't duplicate the weird math issue you're describing, however. If you're comfortable sending your data file privately, we can probably figure out what's happening.
I'll let you know when we've fixed the cost basis incorrectly showing a zero value.
Sincerely,
Brian
Moneydance Support
2
briangideon
on 03 Jun, 2009 01:50 PM
Thanks for the reply. Also, I think I figured out the weird math. What it's doing is taking the weighted average cost basis per share of *all* short/cover lots and using that for the open position. Consider the following example. Enter these transactions in sequence in an investment account after creating the XYZ security.
Short 50 XYZ @ 100
Cover 50 XYZ @ 100
Short 100 XYZ @ 200
Cover 100 XYZ @ 200
Short 75 XYZ @ 150
After these transactions are entered there should be an open position of -75 XYZ. The cost basis should be -75 * 150 = -11250. However, the cost basis (as displayed in the portfolio view) will show -12500 instead. It's getting that by doing ((50 * 100) + (100 * 200)) / (50 + 100) * -75 = -12500.
By the way, I have the security setup to do lot matching. When I click "Edit Lots" I get a dialog box that says there are no sales to match. I'm guessing that is somehow related.
3
Brian Adler
on 03 Jun, 2009 03:57 PM
Brian,
Thanks very much. I'll let you know what we discover!
Brian
Moneydance Support
4
Chuck
on 12 Mar, 2010 03:32 PM
Has this issue been fixed in the application?
Build 743
Mac OS 10.6.2
5
Brian Adler
on 22 Mar, 2010 05:04 PM
Chuck and Brian,
Unfortunately, this issue still hasn't been resolved. I am emailing our programmer today, however, and will try to get this fix in time for our next incremental release. I apologize that it has taken this long.
Sincerely,
Brian Adler
Moneydance Support
6
Chuck
on 25 Mar, 2010 10:30 PM
Thanks!
7
briangideon
on 21 May, 2010 12:09 AM
I just tried out 2010r3 (750) with the file attached to this post and it is still doing the short sale cost basis incorrectly on the portfolio view. The capital gains report is incorrect as well.
8
Brian Adler
on 26 May, 2010 01:14 AM
Brian and Chuck,
I am very sorry. I am working to get this sorted out. I apologize that it wasn't included in the most recent release.
Brian
Moneydance Support
9
briangideon
on 26 May, 2010 01:09 PM
No problem. It is not a major issue for me. It would be nice to have a fix, but it is not causing me too much grief.
10
Chuck
on 03 Sep, 2010 04:21 PM
Same here. Would be very useful to have fixed prior to end of year for clean tax reporting.
11
Brian Adler
on 07 Sep, 2010 08:42 PM
Chuck and Brian,
I've created a bug ticket to expedite getting this fixed. We'll have it squared away in time for end of year accounting.
Best,
Brian
Moneydance Support
12
David
on 02 Apr, 2011 06:47 PM
Is it possible this user is using the average cost basis instead of selection of lots (available when you edit security?)
I have a related problem and that is simply that you cannot specify lots when shorting a stock. You "short" the stock meaning you sell it, but when you go to allocate the lots nothing is there because it apparently only looks for "buys" that precede the sale. Obviously, when I short, the sale comes first. Driving me nuts. i am in the beta preview for 2011
13
Angie Rauscher
on 08 Apr, 2011 01:46 AM
David,
I've attached the ticket for short sale share allocations to this thread, Thanks for your suggestion. I have created a ticket for this issue. The ticket is attached to this discussion. By posting in this discussion your interest in the ticket has been registered. This is equivalent to voting for it, and you'll be automatically notified when there are further developments.
Please let me know if I can be of further assistance,
Angie Rauscher
Moneydance Support
14
dalefurrow (Fellow User)
on 03 Feb, 2012 05:22 PM
Adding my vote to resolve this. This issue will be heating up for 2011 because of new IRS reporting requirements for brokerages. Also, it just doesn't look that hard...a few lines to adapt the CapitalGainBuy class (or the introduction of an analogous CapitalgainsCover class) to insert the appropriate "cost_basis" keys should do the trick. Sample xml file attached for anyone who is interested in the details. I've had some discussion with users of my investment reports extension...I'm going to add an interface for gains calculation, but will probably hold off on implementing a lot matching calc until this is resolved (one way or the other).
15
toomuchjava
on 20 Oct, 2013 04:20 AM
I started a new discussion on essentially the same subject before I saw this thread. Indeed, please resolve this issue.
System closed this discussion on 31 Mar, 2015 03:29 PM.