Hi, My cost basis (i.e. purchase value) in PP does not match my cost basis in Interactive Broker for my Glencore shares. The reason for this is that I have received a “Return of Capital” (ROC), which adjusts my cost basis (i.e. purchase value) lower. What is the best way to account for this change in cost basis? Is there a transaction type in PP that can account for this or do I need a workaround?
As far as I understand the ROC is tax topic, right?
From a performance perspective this must not be reflected as tax doesn’t influence performance but capital gain/loss.
If you ignore this fact you can edit your purchases prices, but this will lead to a performance increase which never happened in reality.
So in case I understand your question correctly, it’s up to you how to handle it. A dedicated transaction type does not exist.
All possible transaction are:
and can be found here: Menu - Portfolio Performance Manual
Hi, ROC is a payment per share that will adjust the cost basis of your shares which means when you sell your shares the capital gains tax on the share is different. This differs from a dividend which is taxed according to income tax (not CGT) and does NOT adjust the cost basis of your shares. Those options you list do not include ROC, so I am wondering if someone has a work around to change the cost basis of the shares (apart from simply editing the value of the shares manually).
So my understanding is right so is my answer.
Lowering your cost base will increase your performance which is simply fake.
Performance gets measured from the original purchase price to selling price… not more not less.
The point is that in order accurately reflect my performance after tax, I need to know which performance is from capital appreciation (ROC will adjust my cost basis and therefore impact capital appreciation) and which performance is due to dividends (ROC does not impact dividends and therefore is income tax irrelevant). Therefore it is necessary to be able to adjust cost basis of my shares in the event of ROC.
In addition, in order to be able to compare cost basis with my broker (IB in this case) I need to be able to replicate the same process that they employ. Only this way will PP accurately reflect my broker account (which is one of the aims of the software). Therefore, to accurately reflect IB, PP needs to be able to take into account FIFO, ROC and fees in the cost basis calculation. So my question is: Is there a way to adjust the cost basis to include ROC and fees?
I understand what you try to achieve. But PP can’t handle it different to what I initially wrote you.
PP is a performance tracking tool and doesn’t care about taxes rather after you entered them.
Then adjust the purchase price. And deal with the consequences.
The aim is to have a precised tool to measure performance not to replicate what brokers are publishing.
Ok – Then the only workaround is to adjust the price. Understood.