Treasury Bonds

Question

I began investing in US treasuries zeros.  Here is my problem:

* Buy a bond in January for 20000
* Bond matures July 1 (6 months) @ ~ 5% and redeems at 20500

Quicken handles the buy and sell OK, except it shows a 20500 realized gain.  When in therory it should be a swap of the 20K and show ~ 500 realized gain?  I found this by trying to add realized gains as a line item in my budget - which showed the 20500 as income?

What am I doing wrong?  How do I fix it?

Tom Young · Answer

I haven't bought and sold a bond for a while now.  I do use the Bonds Bought action for the purchase and that identifies the security as a "bond."  For the sell I just use the standard Sold action.  So the purchase of 5 discounted T-bills at 97 using the Bonds Bought action is entered into the Transaction List (Register) as "50 at 97."  So the Sold action uses the same numbers, 50 units at $97.  Then a separate IntInc action of the same date using that same bond.

I'm not sure what you're looking at when you refer to "in the budget."  Is that a Report (Reports > Spending > Current Budget) or on the Planning tab (Planning > Budgets)?  The net effect of the maturity is $0 capital gains and $XXX interest income and that's what you should be seeing in both places.  Maybe something's wrong with your setup?

aLfGordon · Answer

Also I noted if I do a report for gains, it shows zero sum dif, but the only place I'm seeing the wrong numbers is in the budget.

aLfGordon · Answer

Tom:  Thanks.  I redid the entries.  Quicken still posts the zeros as a realized gain even though I buy and sell at the same price.  You say you don't like to use the buy bonds/sell bonds entry.  What should I use?