Problem with realized gains

Should you have entered the interest as interest received? How did you treat the interest you received in the past? If you sold the bonds with accrued interest wouldn,t you have 2 tax events: the interest you received and a capital gail/loss being the difference you paid and what you sold them for net of accrued interest?

Hank

Conny, Can you be more specific regarding the type of bonds that you're describing?

The interest payments received on bonds is USUALLY recorded as "Interest Received", not "Return of Capital" as you've indicated. And the "Gain/Loss" is USUALLY, the difference between the principal paid plus commission minus cost. The "Total Return" would include the interest received plus the "Gain/Loss".

Of course, if you're talking about zero-coupon bonds or T-Bills, the rules change significantly. Thus the first question.

db

Hi,

its a german bond (european) and I use Quicken USA-Version. Maybe thats a problem too. But the systems should work the same:

I buy 10 (bond)shares for 10 Dollars each = 100 Dollars Once a year I get the interests transfered to my chequing account lets say

10 Dollars in our example At the end I sell all the 10 shares for 12 Dollars each = 120 Dollars.

In my opinion the program should show me a gain/loss of 30 Dollars under the report "Capital gain/loss" but however I enter the transactions I never get the right result. When I enter the 10 Dollars as "Return of Capital" the 10 Dollars are substractet of the 100 Dollars and then I have a gain of 33.33 % but in my opinion I have a gain of 30 % (cost basis 100 Dollars, 120 Dollars the value of the shares and 10 Dollars interests = 130). I tried it with "Income/Interest" but I don't get the right result. How do I have to enter the transactions so that I can see the right gain under Summary as long as I don't sell it and afterwards under the menu "realized gains/loss"?

Thanks for your help !!!

Conny

"danbrown" schrieb im Newsbeitrag news: snipped-for-privacy@j33g2000cwa.googlegroups.com...

Conny, Either you dont understand your investment ... or you can't explain it.

1) is it a bond or a share? can't be both. (even if it's a mutual fund that holds bonds, it's a share, not a bond). 2) does it pay interest or dividend or return of capital. pick any one. 3) if you buy something for 10 dollars and sell for 12 that's a 2 dollar gain. Not 3. even if you've received 1 dollar in dividends/interest. That's the difference between "gain/loss" and total return ... as I indicated previously.

db