Capital Gains distributions

Microfiche

Can't seem to find anything on how to enter the capital gains portion of a mutual fund distribution in Canada. Short, Mid and Long term classes are a US thing I believe - how do I enter properly in Canada?

Tom Young

From the shot that you included in your post I take it that you received the distribution in cash.  If that's the case there shouldn't be any "book value" issues, I wouldn't think.  It should simply increase cash in the Account by the amount of the distribution and increase an income Category - capital gain - by the same amount.  That's a balanced entry and that's the correct accounting.

The issue of only half the capital gains actually being taxed isn't a "generally accepted accounting" issue, it's a "Statutory accounting" (tax) issue, and that's entirely separate from your Quicken account.  And since Canada apparently doesn't distinguish capital gains by holding period I'd guess any term you select would be OK.  At a guess the Tax Reports in Canadian Quicken would take care of the income tax accounting.

(You'd think Quicken would put a little more effort into its Canadian version looking more like a Canadian user would expect to see it.)

Make a backup and make the entry and see what happens and how things turn out.  If it seems to come out wrong for some reason - it probably won't - you simply restore the backup and post here again; somebody that actually uses the Canadian version might have a better answer.

Tom Young

I've never looked at how Canada taxes capital gains but a brief fly-buy seems to indicate that in Canada you're taxed at "regular tax rates" on half the capital gain.  There doesn't seem to be a distinction by the term of the holding.

The Quicken Canadian version doesn't have that treatment somehow "built in" to the product?  Are you really seeing that "Short", "Mid" and "Long" term when you try to make an entry?

Microfiche

Yes - I am not sure what Quicken does with those short/medium/long terms, or what it effects are, but that is my only option.

Microfiche

Can't seem to edit for some reason so...
...and the taxation is as you describe. Not so worried about that part, more to how these US options affect book value. I guess if they don't then it doesn't matter, and I can use any of them. But it seems silly to have them in the Canadian version.

Tom Young

From the shot that you included in your post I take it that you received the distribution in cash.  If that's the case there shouldn't be any "book value" issues, I wouldn't think.  It should simply increase cash in the Account by the amount of the distribution and increase an income Category - capital gain - by the same amount.  That's a balanced entry and that's the correct accounting.

The issue of only half the capital gains actually being taxed isn't a "generally accepted accounting" issue, it's a "Statutory accounting" (tax) issue, and that's entirely separate from your Quicken account.  And since Canada apparently doesn't distinguish capital gains by holding period I'd guess any term you select would be OK.  At a guess the Tax Reports in Canadian Quicken would take care of the income tax accounting.

(You'd think Quicken would put a little more effort into its Canadian version looking more like a Canadian user would expect to see it.)

Make a backup and make the entry and see what happens and how things turn out.  If it seems to come out wrong for some reason - it probably won't - you simply restore the backup and post here again; somebody that actually uses the Canadian version might have a better answer.

Microfiche

I just took a screen grab of the first thing that came to mind - in reality, what I am dealing with is reinvested distributions. With some of my mutual funds, a capital gains percentage may be announced at the end of the year - i.e. if I received $1000 in reinvested distributions over 2019, the fund advises (at year end) that 20% was capital gains, 30% was eligible dividends, and 50% was interest (for example). In order to clarify my year end reporting, I go back to those distributions and prorate the income by type. So I am trying to determine how to enter a capital gains portion. I hope that makes sense?
Unfortunately, I think that Canada is a small portion of their customer base, so sometimes we get left out.
I will see what happens when I try various terms.

Microfiche

My mistake - I guess I assumed a reinvested capital gains distribution might have a different effect on ACB than say a dividend distribution. I hadn't thought it all the way through and had return of capital distributions in my mind, where the ROC reduces the ACB. Also had no idea if the US classes of capital gains did anything funky to ACB - but it appears they do not. I assume it is only for US tax reporting and calculations. Thanks for your patience!