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Cost Basis Calculation

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RogersDA

29 Apr, 2009 08:25 PM

A while ago I purchased 800 shares of XYZ stock where the commission was $9.99. Weeks later I sold the 800 shares of XYZ stock for a profit, incurring another $9.99 commission. Later that same day I bought the same stock (at a lower price) for yet another commission of $9.99.

In Moneydance's account register I recorded the initial buy and the first sell. All was good.

I then entered the second buy entry using the following: Shares 2400, Amount $3,991.59, Fee $9.99.
The price per share is calculated correctly as $1.659 (($3,991.59 - $9.99)/2,400) = $1.659

In my account register the amount of $3,991.59 is correctly subtracted from my cash account.

However when I first went to the Securities Detail Page it prompted me to match my sale to the buy lot. I did that. However, now the XYZ stock shows Shares: 2400 Price: 1.67 USD Current Value: 4,008.00 Cost Basis: 4,001.58

The cost basis is incorrect. The cost basis is $3,991.59. For some reason Moneydance is incorrectly adding an additional $9.99 to the cost basis.

1. 1 Posted by RogersDA on 05 May, 2009 10:47 PM

   

   Any response?

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2. 2 Posted by Angie Rauscher on 07 May, 2009 08:43 PM

   

   From a U.S. tax perspective, cost basis of a stock is price plus fee. This is how the program calculates basis. The program adds fee amount to the price paid for the stock (# of shares * price per share) to determine the cost basis. To avoid the double recording of the fee you experienced, enter only the cost of the shares in the "Amount" field and the cost of commission or fees in the "Fees" field.

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3. Angie Rauscher closed this discussion on 07 May, 2009 08:43 PM.

4. RogersDA re-opened this discussion on 07 May, 2009 11:55 PM

5. 3 Posted by RogersDA on 07 May, 2009 11:55 PM

   

   Well - that might correct the cost basis calculation.

   But, the Amount figure is what is deducted from the cash account. So, if the Amount figure does not include the fee then (a) the cash deduction is wrong and (b) the share price calculated is wrong.

   Either way there appears to be a mix up.

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6. 4 Posted by Angie Rauscher on 07 May, 2009 11:59 PM

   

   There is a mix-up, and this bug has been registered with our developer.
   

   To avoid it, you can enter the share price, number of shares, and fee in the appropriate fields, and the program will correctly calculate the basis and subtract the correct amount (share price* number of shares + fee) from the cash account.

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7. Angie Rauscher closed this discussion on 07 May, 2009 11:59 PM.

8. RogersDA re-opened this discussion on 08 May, 2009 01:06 AM

9. 5 Posted by RogersDA on 08 May, 2009 01:06 AM

   

   Thanks, Angie....

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