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Author
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Topic: Cash Flow Report
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djlundell
Member
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posted 08-26-2000 04:16 PM
  
My cash flow report is wrong. It picks up:
1. Avioded recognized gains on family gifts of appreciated closely held company stock. We book these as a zero income sale per FN instrcutions. e.g. Dad's basis is $1.00, value is $100.oo. "Avioded Gain is $99.
2. It also picked up the total value of the gifted shares as income.
3. Then, it picked up as an cash expense, the gift "expense". Unfortunately, the amounts are not the same because I use book value to value the shares in FN & the appraisal from the gift tax return to value the gift expense. The reason for the difference is that we have 30 entities, but gifts are made only from one or two & that's all that there are appraisals for. So I consistentlt use book value in FN.
4. It also picked up a large unrealized loss amount, which I can't identify.------------------
Douglas J. Lundell
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John
Administrator
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posted 08-30-2000 08:43 AM
The transactions included on the Cash Flow report is determined by the Bank Accounts listed at the bottom. Any transactions entered in these Bank Accounts will be included. If there are journal listed as Bank Accounts that you do not want to be included then change the format type for the journal from Bank Account to something esle.Any sold investment transactions will include the distributions for that transaction. This will include the asset that was sold but also the capital gain income and the relieving of unrealized gain.
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margaret miles
Member
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posted 08-31-2000 04:57 PM
We approach the gifting of appreciated securities a little differently from FN. We do the following: In a brokerage account, we sell the security for the cost basis. (No gain or loss results and unrealized gains are automatically adjusted.) Then we record a fictious deposit for the difference between the cost basis and fair market value to a miscellaneous non-taxable income account. We include a complete description of the transaction. We use the same payor/payee name as the sell transaction. Finally, we record a fictious charge for the entire amount of the gift to an expense account called gifts. We use the same payor/payee name and include a complete description of the transaction. The result, no realized gains, asset is gone, net of non-taxable income account and expense account equals the cost basis of the assets. The transaction by account reports for the account "gifts" gives a clear audit trail at tax time, schedule D does not need to be adjusted for gains and your cash flow report will have a net of the income and expense to equal the cost basis of the gift. In addition, if you print transactions by payor/payee, you will have the entire transaction on one report.------------------
m miles
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