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Royd11
September 26, 2019
Solved

How do I input transactions for buying stocks or investing in mutual funds - expense or transfer?

  • September 26, 2019
  • 5 replies
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Currently I have Mutual Funds and Stocks setup as Current Assets>Investments. When I purchase a fund with my bank account, should I use expense or transfer? How does it affect the profit & loss, balance sheet and cash flow reports doing it one way or the other?

    Best answer by Rustler

    The truth is QB is totally unsuited for investing

    use quicken, I have no experience with mint in this area so I am not sure it will work

    If this is  a company investment account, keep the total asset cost in QB, but track purchase, splits, dividends, return of capital, reverse splits, spin offs, mergers, etc etc in quicken and just make total entries in QB

    5 replies

    Rustler
    RustlerAnswer
    September 26, 2019

    The truth is QB is totally unsuited for investing

    use quicken, I have no experience with mint in this area so I am not sure it will work

    If this is  a company investment account, keep the total asset cost in QB, but track purchase, splits, dividends, return of capital, reverse splits, spin offs, mergers, etc etc in quicken and just make total entries in QB

      M
      marty_fll
      February 18, 2022

      Thanks for the frank answer, I had come to the same conclusion re QuickBooks and tracking brokerage accounts but thought maybe I was just too dumb to figure it out. Sorry I'm a bit late to the game but "quick" <groan> question: wondering which version to buy, Quicken Starter, Deluxe or Premier? Keeping in mind I only want to track a brokerage account I opened in my company name and will continue to use QuickBooks for business accounting. I don't need to track my personal expenses.

      john-pero
      john-pero
      September 26, 2019

      Stocks and mutual fund investments are assets. If your business buys and sells then you have purchased an asset to hold. Purchase price plus any fees. Never adjust value (basis) due to market fluctuations. QB is not designed to be a market tracker.

      When you sell your receipt minus fees, minus book value of stock is your capital gain. Depends on your country laws, but here 1 year or less held is short term gain taxable at an individual's marginal tax rate. Longer than 1 year is long term capital gain with a different flat rate of taxation on the gain.

      An example: al in US dollars: I buy 100 shares of Tata Motors (TTM on NYSE) at $22.15 through eTrade but I am a slow investor, less than 30 transactions per quarter, $6.95 per transaction (4,95 if over 30) My cost for these shares is 2215+6.95= $2221.95

      Say it goes up to $25 and i sell, I get $2500-$6.95 or $2493.05 less my basis of $2221.95 results in a gain of $271.10 Say it dropped to $20 and I got nervous and sold, I receive $2000 - - $6.95 or $1993.05 a capital loss of $222.90. Neither transaction really results in income or expense but in gain or loss. Length held determines short or long. Tax treatment will determine where to claim and if the loss can even be used to offset other income.

      Now, after all that, if this is the business money being invested and the stocks are owned by the business go ahead and run it through your company books. If it is personal investing it has no place in QuickBooks. QuickBooks is not personal finance software

        john-pero
        john-pero
        September 26, 2019
        As far as the actual transaction you do in QB it is better to use Expense even though it is not an expense - this way you can identify the brokerage house as the vendor or even the fund name, but the posting is the purchase of an asset so it is not going to affect P&L
          T
          Triangle Cap
          November 9, 2020

          My business bought into another business as a partner by paying each pre-existing partner. How do I record those transactions (checks were written, from my business accounts)? Expense? Asset?

          qbteachmt
          qbteachmt
          September 26, 2019

          I use Quicken exactly for this reason. It has the tools built it, for lot purchases and sales, investment earnings as dividends or return of equity or reinvestment, stock splits, conversions, FMV updates, etc.

          If you intend to do this with any QB tool, you will need to be doing manual entries and only for Realized gain/loss, as well. I do advise you to use a noninventory item for this, so you can include quantity.

          I really do not know much about the India stock exchange.

            A
            Arif3
            January 7, 2021

            Hello, how can I recognize the profit of stocks that purchased for company such as bitcoin, without increasing in the amount of stocks?
            please help me

            john-pero
            john-pero
            January 7, 2021

            If your company invests in stocks or bonds or any other item that appreciates (or depreciates) based solely on market value fluctuations you keep track of your acquisition basis only until you sell. If you invest $30,000 in a single bitcoin that is an asset that cannot be deducted as an expense until you sell it. If you sell in less than a year and you earn a profit that profit is taxed at your business rate (you may be a pass through entity) but if you hold it longer than a year your profit will be treated as long term capital gain.  When you sell you post the price received and subtract your basis to reflect gain

              K
              KAVO
              December 13, 2023

              I can only speak to the use of Quickbooks DESKTOP. I do NOT use Online version.

               

              You can only track the cost basis of investments in QuickBooks. You input/set-up your brokerage account as a "bank" type account. Let's say your brokerage is Charles Schwab - that is what you name it. I then track the cash transactions in a sub-account called "Cash Transactions" and the Stocks I put in a sub-account, "Stocks".

              When you reconcile the account each month, you notate your statement, where the stocks positions are listed, with the cost basis of each stock, and then add that to the "cash balance" in the account and that is your ending statement balance you will reconcile to.  Respond if you need further instructions....I've been doing this for 30 years in QuickBooks Desktop.

                M
                MFiretto
                May 13, 2024

                I'm new to bookkeeping and the company I work uses QB desktop.  The company has a checking account and Merrill Lynch mutual funds.  I transferred $50k from the checking to the Merrill Lynch acct by cutting a check which shows up as an expense on the Profit & Loss Statement.  How do I correct this?  Also, the prior bookkeeper was making adjusting entries every month based on the Merrill Lynch statement to reflect the increase/decrease in value on the Balance Sheet and Income/Expense on the Profit & Loss.  

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