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Bookkeeper_Lynn_2024
August 3, 2024
Solved

Realized Gains and Losses not on Brokerage statement from Sale of Investments

  • August 3, 2024
  • 1 reply
  • 0 views

Hello,

 

I'm working on journal entries for an investment account, but am at a loss for the month that all of the investments were sold. 

 

One of my clients invested funds in Treasury Money Market accounts, an ETF (stock), and Treasury Notes. The brokerage statement lists unrealized gains and losses for the ETF and Treasury Notes. All of these investments were sold this year, all with gains, but the brokerage statement has $0.00 capital gains and losses on the statement. What am I missing? 

 

Dividends were earned on the Treasury Money Market accounts, so it doesn't seem that these accounts will have a Realized gain or loss when sold.

 

When each of the Treasury Notes were sold/redeemed, interest was added, so perhaps these don't have a Realized gain or loss either, even though the statement tracked Unrealized gains and losses.

 

The ETF sold for more than the cost basis, so there should be a realized gain (less than $100). Why isn't this on the statement?

 

If there should be a realized gain, how do I zero out the unrealized gain/losses account?

 

I appreciate any advise you can provide. Thank you!

Best answer by Rainflurry

@Bookkeeper_Lynn_2024 

 

I don't think you're missing anything.  The Treasury MMF and T-Notes don't have capital gains.  They provide dividends (MMF) and interest income (T-Notes) that are reported as ordinary income.  On the ETF, the reporting requirements for brokers are not the same as taxpayers.  So, even if there's <$100 gain on the sale of the ETF, while the broker may not be required to report it, your client should report it as gain.  Unrealized gains are closed by debiting unrealized gain and crediting gain on sale. 

1 reply

Rainflurry
RainflurryAnswer
August 3, 2024

@Bookkeeper_Lynn_2024 

 

I don't think you're missing anything.  The Treasury MMF and T-Notes don't have capital gains.  They provide dividends (MMF) and interest income (T-Notes) that are reported as ordinary income.  On the ETF, the reporting requirements for brokers are not the same as taxpayers.  So, even if there's <$100 gain on the sale of the ETF, while the broker may not be required to report it, your client should report it as gain.  Unrealized gains are closed by debiting unrealized gain and crediting gain on sale. 

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Bookkeeper_Lynn_2024Author
August 5, 2024

Hi Rainflurry. Thank you so much for your response. It is very helpful.

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