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Author Topic:   Entering realized g/l from partnership
Becky Sharpe
Member
posted 01-23-2001 08:02 AM     Click Here to See the Profile for Becky Sharpe   Click Here to Email Becky Sharpe     Edit/Delete Message
What is the most efficient(and correct)method to enter quarterly realized g/l based on reports rec'd from outside investment? (no cash rec'd) I have the investment coded as a LT invstm t/f it's on the Other Invstm report. I first entered in the investment journal..Being coded as LT investment, I know it doesn't prompt the "acquire/sold invstm" I've attempted to record the loss and the gain from two previous qtrs and I end up being "out of bal" in the unrealized acct (SPA+OIA, less DEF Tax, should equal UNRLZ on BS). I tried this several ways and still end up out of balance.

This may be one of those Return of Capital transacations but that has never worked right for me (doesn't go into A&L screen and affect the cost & tax basis)

How should these realized numbers affect my cost basis/initial invstm amount?

Thanks!

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John
Administrator
posted 01-24-2001 08:16 AM     Click Here to See the Profile for John     Edit/Delete Message
Long Term Investments should still get the acquire/sold investment prompt. But if the transaction is entered in a General Journal then it does NOT get an acquired investment prompt. General Journal is for adjusting entries. So if you want the cost basis to be affected then enter it in a "Money market/Saving" such as a Broker account.
I recommend setting up a "journal" for each statement that you receive. This way you always know where to enter the transaction. You can even reconcile the statement if you enter other transactions before the statement comes. At year end the Transaction Entry report will be same as the summary of all activity for the broker or other financial institution.

As for this transaction, enter it depending on what needs to be affected. Even no cash was received, it could be like a dividend reinvestment. This is where the money is put back in the investment to be added to the cost and tax basis.
So record a charge to the investment asset. Say Yes to acquired investment. Enter zero as the investment amount since no cash was received. Enter the amount on the first line for the investment asset. On the second line enter an offsetting deposit to an income account for the realized income. As for the quantity, you need to enter some number >0 so enter 1 or .001. If this quantity is a problem then just change it in the Asset/Liab Info back the the original quantity.

If this is reducing the cost basis, then enter a deposit for the investment asset. Answer 'Yes' to sold an investment prompt. Enter the amount for the investment amount. Enter zero for quantity. Yes to the 'Return of Capital' prompt. Charge the income on the second line to some income account. Select Ok to end this transaction. But now you have the cash in this journal. Record a deposit to but this cash to some account for the amount of the realized gain.

The unrealized gain will stay in balance with the difference between the cost basis and the balances as long as two of the three are affected. Since cost plus unrealized gain equal the balance, if the one is changed then one of the other two must also be affected to keep it in balance.

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