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How set MS Money 2004 Standard OEM edition for LIFO Tax calculations RRS feed

  • Question

  • Hi everyone.  I've been using MSM 2004 OEM edition with Win 7 for many years and have been extremely satisfied with it's operation.  The one feature I'd like to change however is the way it records capital gains and losses.  By default, it uses FIFO accounting and I find that I often have a tax advantage in using LIFO.  I can't find anyway to change it to LIFO.  If anyone knows how, can you give me detailed instructions on how to do it?  

    In the event my version of MSM is unable to program LIFO, can you tell my a version that's still available that can? 

    Tuesday, May 12, 2020 5:21 PM

All replies

  • No, I think there is no automatic LIFO setting for any version. FIFO, but not LIFO.

    You can select specific lots, and select the newest yourself.

    Why LIFO?

    Wednesday, May 13, 2020 2:21 AM
    Moderator
  • I'm UK based, I'm not a qualified accountant but I think I know how HMRC (in my case) wants me to handle the computation of my Capital Gains.

    Doing things some other way, to make it LOOK as if my tax liability is lower, seems almost delusional to me - but that's just a personal opinion.

    With Money 2000 International English I can set FIFO ~ I don't know what Money does if I choose NOT to set FIFO (is that: LIFO, FILO or LILO who knows?).

    I have found it much more convenient to export investment reports to Excel and to manipulate them there following my government's rules. This way I can change my Excel functions as tax regulations, rates and allowances change. 

    Teabag 

    Wednesday, May 13, 2020 8:49 PM
  • With Money 2000 International English I can set FIFO ~ I don't know what Money does if I choose NOT to set FIFO (is that: LIFO, FILO or LILO who knows?).

    If you don't select to always use FIFO, Money brings up a pop-up that lets you make some choices, including you-choose how many shares come from each remaining lot.

    You can also right-click the Sell  transaction, and choose ReallocateLots, if you have unsold lots.

    Wednesday, May 13, 2020 10:17 PM
    Moderator
  • @Cal

    «Why LIFO?»

    Not the OP, but I'll give you one reason why LIFO may make sense.  Assuming a general increase in value of the stock over time, LIFO will result in a higher original basis on a sale and therefore a smaller capital gain for tax purposes.  If the remaining shares with a lower basis remain in what becomes your estate on death, the inheritor gets the stock with the basis set at the stock price at the date of inheritance, wiping out any capital gain.  Therefore, you pay less tax up front and your inheritor does not have to pay tax on the difference.


    • Edited by bobjbkln Thursday, May 14, 2020 3:29 AM
    Thursday, May 14, 2020 3:26 AM
  • In the UK share purchases are pooled: lots are irrelevant and using lots gives incorrect results. https://www.gov.uk/tax-sell-shares/same-company

    Pooling is not an option in Money.

    Thursday, May 14, 2020 6:58 AM
  • Probably an unfortunate carry over from the US version where pooling of stock shares (as opposed to mutual fund or ETF shares) is prohibited.
    Thursday, May 14, 2020 7:35 AM
  • Thanks Cal.   In version 8.0.14.1015    Tools > Options > Investments  I can set FIFO but if I unset I don't get the pop-up you mention.

    Reallocate Lots is an option when I right-click on a Sell transaction ~ and I could then choose which shares to use ~ I just don't do it.

    Teabag

    Friday, May 15, 2020 1:14 PM
  • Thanks Dominic.  We both know what has to be done in UK and I am familiar with the web page you pointed to.  I ducked explaining the procedure because I knew 'Averaging' doesn't properly describe it  and I couldn't think of the word you have used ~ 'pooled or pooling' ~ which is spot on.
    Friday, May 15, 2020 1:34 PM