Money market mutual fund

I'm a bit confused. "Units" in a MM fund are usually cash..... Also, in a MM fund, what you are calling "interest" is actually "dividends" (at least in US accounts).

Whenever I add a transaction that is a "reinvest dividends", it *increases" the cost basis. That is what you want to have happen. Anytime you reinvest earnings in an investment, it increases the cost basis. I'm not familiar with Canadian tax laws, but in the US, we pay taxes on earnings (interest or dividends), so by increasing the cost basis, you avoid having to pay taxes again on that income.

In Canada, distributions from Money Market funds are typically called dividends, but they are taxed as interest income.

Hank is correct -- your cost base should be increasing, not decreasing, as a result of reinvested distributions. In fact, your cost base should always be equal to the market value.

The correct Q05XG transaction for a money market fund distribution is: Transaction: Reinvest - Income Reinvested Transaction Date: Date of distribution Security Name: Name of Money Market Fund Interest: Amount column: amount of distribution Interest: Share column: number of shares received from distribution (normally amount/10 as units are priced at $10 each)

Does this help?

Why didn'y you treat the money market fund as a bank account?