Designating specific lots for sale in mutual fund RRS feed

  • Question

  • I have forgotten how to get to the specific lot dialog box when preparing to record a sale.  I want to manipulate various lots to see how they affect the gain/loss before deciding which lots to sell.

    Can anyone help with instructions?  Many thanks.

    Wednesday, November 30, 2011 4:50 PM

All replies

  • You will be prompted to allocate your sale to lots during the sell process.

    Tax authorities have rules about how lots MUST be allocated for tax purposes. If you are, or might become, subject to taxation on the results of a disposal you need to follow the tax rules.

    Wednesday, November 30, 2011 7:04 PM
  • The rules are country-dependent. In the US, you can uses specific identification of mutual fund shares if you have not previously used the average methods for that fund. Single Basis  that are the other possibilities.

    To do this in US or Canadian versions of Money (and maybe others), you will have to think about two areas:

    1. Un-tick Tools->Settings->InvestmentSettings->TrackAllInvesmentsAsFIFO. That will cause Money to ask which shares you sold.
    2. In the mutual fund's Investment Details, set the CostBasis drop-down to ActualCostBasis if you want to use what you paid for those shares. The default is AverageCostBasis(DoubleCategory). In AverageCostBasis(DoubleCategory), if you are selling shares newer than a year, what you paid for all shares in the last year will be averaged to set the basis for what you are currently selling. In single cost  basis, the average of all shares would be used.

    In the US, many funds have tracked the single basis average and assuming FIFO regardless of what method you were actually using. Now they are required to track basis and report basis, I think. I wonder what is going to happen for those who use a method other than the one the company uses to report basis. I would guess the IRS will realize that there is more than one legitimate way. We will see how inquisitive they get if there is some difference.

    There appear to be explicit recent US requirements to identify shares to your FI if you don't want to use specific identification. Many brokers are adding that ability to their websites. But anyway, you were asking about how to enter things into Money rather than how to deal with your FI.


    Wednesday, November 30, 2011 10:37 PM