tag:infinitekind.tenderapp.com,2009-01-14:/discussions/problems/196-incorrect-cost-basis-calculationInfinite Kind: Discussion 2011-05-15T22:43:00Ztag:infinitekind.tenderapp.com,2009-01-14:Comment/2556922009-07-18T12:00:27Z2009-07-18T12:00:28ZIncorrect Cost Basis Calculation<div><p>I have this same problem myself and wonder if that is intended
by the developers.</p></div>Ronaldtag:infinitekind.tenderapp.com,2009-01-14:Comment/2556922009-07-18T12:27:44Z2009-12-10T00:14:30ZIncorrect Cost Basis Calculation<div><p>Hi Mark, Hi Ronald<br>
The way I understand it, is that if you buy another $50 worth of
(VBMFX) whether through reinvesting a dividend, using money from
your wallet or money you stole from your mother's cookie jar,
you're still spending money to buy the shares and therefore uping
your cost basis. Think of it this way, if Vanguard paid you the $50
dividend in cash and you turned around and bought $50 worth of
(VBMFX) wouldn't you expect your basis to increase by $50? I am by
no means an exper but I think it's correct for MD to report 0%
price change if the NAV is still $10 a share. -Kevin N.</p></div>-Kevin N.tag:infinitekind.tenderapp.com,2009-01-14:Comment/2556922009-07-18T16:25:46Z2009-07-18T16:25:46ZIncorrect Cost Basis Calculation<div><p>Kevin is correct. If you use dividend re-investment, it's just
and automated way of purchasing a security at the time of the
dividend. It would be the same as if you paid the price of the
security out of cash. The dividend represents income that you earn.
What you do with it is a separate issue.</p>
<p>If this is a taxable account (non-IRA), you will be taxed as if
it were income off Schedule D. If it's an IRA or 401(k), it's
non-taxable, but still income.</p>
<p>Mike</p></div>miketag:infinitekind.tenderapp.com,2009-01-14:Comment/2556922009-09-05T01:56:29Z2009-09-05T01:56:34ZIncorrect Cost Basis Calculation<div><p>This may be true for tax purposes, but it is still a desirable
feature, perhaps in the form of the return on investment or rate or
return reports for which trac bugs exist. This is my single most
desired feature in MoneyDance at present.</p></div>Douglastag:infinitekind.tenderapp.com,2009-01-14:Comment/2556922009-09-16T21:36:38Z2009-09-16T21:36:38ZIncorrect Cost Basis Calculation<div><p>Hi</p>
<p>Reading the wikipedia article on dividend reinvestment plans it
seems that a dividend reinvestment will increase your cost basis.
Here is the link:</p>
<p><a href=
"http://en.wikipedia.org/wiki/Dividend_reinvestment_plan">http://en.wikipedia.org/wiki/Dividend_reinvestment_plan</a></p>
<p>"A downside of using DRIPs is that the investor must keep track
of cost basis for many small purchases of stock, and maintain
records of these purchases"</p>
<p>If a div reinvest didn't change the cost basis you wouldn't have
to keep track of the cost of the many small purchases. I am of the
belief that Moneydance is calculating the cost basis for div
reinvests correctly. However if you can point me ot a reputable
source that demonstrates otherwise I would be happy to take a look
at it.</p>
<p>Sincerely</p>
<p>Ben Spencer</p></div>Ben Spencertag:infinitekind.tenderapp.com,2009-01-14:Comment/2556922009-09-16T21:47:47Z2009-09-16T21:47:48ZIncorrect Cost Basis Calculation<div><p>Ben, I'm not questioning that Moneydance isn't calculating cost
basis correctly. Rather, I'm pointing out that there is
<em>other</em> information people would like. Take a look at the
"Reinvestment when capital is at risk: rate of return and yield"
section on the Wikipedia article on Rate of return.</p>
<p><a href=
"http://en.wikipedia.org/wiki/Rate_of_return#Reinvestment_when_capital_is_at_risk:_rate_of_return_and_yield">
http://en.wikipedia.org/wiki/Rate_of_return#Reinvestment_when_capit...</a></p>
<p>You can see in the worked example how the cost basis relates to
the capital gains to derive a rate of return.</p></div>Douglas Stebilatag:infinitekind.tenderapp.com,2009-01-14:Comment/2556922009-09-17T01:33:11Z2009-09-17T01:33:11ZIncorrect Cost Basis Calculation<div><p>Our wiki is integrated with our <a href=
"http://moneydance.com/trac">feature request and bug reporting
system</a>. Please feel free to use these systems to help improve
Moneydance by bringing bugs to our attention and requesting new
features. It appears there is already a <a href=
"http://moneydance.com/trac/ticket/1910">Return on Investment</a>
feature request ticket. We now also have voting on all existing
tickets, which helps us determine which requests have the most
demand.</p>
<p>Please let me know if I can be of further assistance, and thank
you for your interest in Moneydance.</p>
<p>Angie Rauscher<br>
Moneydance Support</p></div>Angie Rauscher