What starting balances should I use:
cost basis or fair market value?

1) Enter cost basis as starting balance:
The cost basis is needed to be entered for each investment into the Asset/Liab Info. Enter this number as the starting balance. This can be entered from the Chart of Accounts or on the Balances for Accounts screen. Once the starting balance is entered then update the securities to market value by Entering Prices to Update Securities or by using Navigator Access. This will create a transaction amount for the total unrealized gain since the security was purchased. One way to avoid this large gain in the first month is to do this process in the prior year. Set the data files up for the prior year. Enter the cost as starting balance. Update to market value as of end of last year such as Dec 31. Now do Begin a New Year. Large unrealized gain to market value is in the prior's years data files. Starting balance for new year is market value.

2) Enter market value as starting balance:
Enter the starting balance with market values in the Chart of Accounts or Balances for Accounts screen. Enter the cost basis for each investment on the Asset/Liab screen. Now the starting balance - Balance Sheet has the current market values. However the starting balance for unrealized gain is zero when it should be the total difference from the cost basis and current market value for all investments. To determine this amount, run the cost basis balance sheet. Take the amount for the cost basis for Unrealized Gains/Losses. Adjust the Starting Balance for Unrealized Gains/Losses by this amount. The cost basis for Unrealized Gains/Loses should be zero. Rerun the Cost Basis Balance Sheet to verify it.