Can't Enter Gifted Securities

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The Portfolio Performance seems to work well and has a clean interface. I recently decided to enter some test data before committing to the software.

A friend had gifted me with two securities. They are HBAR-CAD (100 shares) and XLM-CAD (25 shares). How do I enter these as securities? Obviously, I didn’t Buy them so they have zero value in capital gains until I Sell them.

I also can’t give them a value because that would imply I bought them. In the Quicken financial software, I can enter them as the appropriate shares with zero value.

Is this something I’m missing out in understanding? My apologies in being thick headed if the procedure is just a couple of “obvious” buttons I need to click! Why can’t I put in $0.00?

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Inbound delivery.

From a performance perspective there is no difference between a gifted stock or an inherited or a bought one.

The price should match the quote from the day you got them.

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As Sn1kk3r5 pointed out allready, there is no free share, no matter where it originates from.

I am interested what performance would calculate the day after you booked a zero purchase … say for a share which you sell the next day for 20 EUR.

I would rather inform the Quicken forum that the zero purchase method for shares simply doesn’t make sense

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To be honest, it could make sense if you distinguish in your reporting. It doesn’t make sense for us, since we have no way to distinguish.

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Correct, but for shares you typically are interested in the performance. A performance based on a zero initial value does not exist.

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I’m with you. But for instance, the ones which like to analyze their capital benefits on employee shares are not only interested in performance. But this goes to far off topic.

…is called infinity :grinning_face:

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right :grin: then it would not matter if solde for 20 EUR or for 2000 EUR … both infinity. I know what you mean.

correct, but then putting in a 0,01 EUR value would alter the exact gain only minimally.

I think we are on the same page … keep the good work

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But it’s not free. I’m attempting to pay 100% on the capital gains instead of a portion.

Accordingly to my research, gifting cryptocurrencies in Canada is generally not considered a taxable event for the giver. However, it may trigger capital gains tax if the value of the crypto has increased since it was acquired. The recipient does not pay tax upon receiving the gift, but they will need to consider the fair market value of the crypto for future transactions. This is in line with what you guys claim on the previous.

In Canada, gifting cryptocurrencies is treated differently than selling or trading them. When you gift cryptocurrency, it is considered a disposition for tax purposes. This means that you may need to report any capital gains or losses that occur at the time of the gift.

What confuses me is that stockhouse.com says,

"When you transfer stocks you’ll need to calculate any capital gains - basically, the difference between what you originally paid for the stock and its market value at the time of the transfer.

When gifting stock keep in mind that the recipient [that would be me] of the gift will inherit your adjusted cost base (ACB). Which means, when they sell the stocks later, they’ll pay capital gains based on your original purchase price, not the value when you gifted it."

My friend can’t provide this information on the original purchase prices due to his circumstances. So, for the test I worked on the original price of the stock/security is set as $0.00 - I’m paying for the whole price. I’m sure the Government of Canada tax auditors wouldn’t mind me over declaring on taxes than dinging me interest for unpaid taxes! $0.00 means I’m paying 100% of the capital gains, while a higher amount for the shares means I’m not.

Personally, I wouldn’t care if these shares sat around until after I’m dead and buried. I don’t have to deal with them. Unfortunately, I like my coffee and wouldn’t mind selling and converting to Canadian dollars then go buy a cup sometimes next year! :grinning_face_with_smiling_eyes: Well, this is what happens when I experiment with a software (portfolio performance) and then realize that I have a situation that didn’t occur to me - a real head scratcher.

I suppose that I could subscribe to one of those Internet cryptocurrency financial services. They can generate an official tax report that’s Canadian tax auditing certified - well, at least for the first year. I can see what them do.

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Hey VraiPhil,

I am afraid you have a very special case there and I doubt you will be able to reflect that in PP in that depth.

Be aware of the fact that PP is not a taxation software in which you can predict or simulate taxes. The only thing you can do is put in absolute taxes after they were quoted to you. This is to help PP to report performances and gains. Also keep in mind that you can alter transactions after you have recorded them.

(1) In your case I would book the gift at the date you got it (inbound delivery) with the (rough) valuie it was worth it at that day. This way you track the performance during the period you posses it.

(2) If your statement is true that you have to pay taxes on all the gains starting from the initial purchase I would alter the value AND the date of the inbound reflecting the entire history of that gift across the gift date.

What I would not do is take the initial purchase value (or 0,01) at the gift date.

Again you can start with (1) and once you get the data or an idea about the initial purchase you can alter that to (2).

Does that make sense?

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Yes, it makes sense.

Also, I got excited when I saw initially that it can handled capital gains. I thought that it might work as a pseudo taxation software. Thanks for clearing up that idea, although I am disappointed it can’t be used as a taxation software.

Thanks for all the help Sn1kk3r5 and you provided. I would probably have more questions once I have entered all the test data I need for Portfolio Performance assessment.

Cheers!

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feel free to reach out again

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For which taxation system in the world? Given the origin of the majority of PP’s developer you might end up with the german and there lies insanity trying to implement that (60% of all books world wide that cover taxes are written in german :wink:

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For the Canadian one.

I had presumed before fully investigating portfolio performance that it had the basic requirements for tax tracking ability applicable to all. It had capital gains as an option!

It’s sort of like checking out a car. I generally expect a steering wheel, a brake and an accelerator pedal regardless of the country making it. I’m naive! :laughing:

Anyways, have a great day! :wink:

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Let’s use capital gains as an example why it’s not so simple. In Germany the tax to be payed on capital gains isn’t simply 25% plus the so called Solidaritätszuschlag of 5.5% on top. Dependent on the amount of capital gains you don’t have to pay any such taxes for the first 1000 EUR or - if your income tax is lower than 25% - your capital gains tax is reduced to this amount.

But that’s not all (of course :wink: If the capital gains come from a sale of shares of a company you’ve owned more than 1% of (and some other criterias) the gains are considered income and taxed accordingly (but only 60% of it, the rest is tax free).

So even with something as simple as a capital gain value, PP can’t tell you for sure how much tax can be expected to be payed.

Indeed :wink:

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Thanks for the help, @Harry_Hirsch. Your explanation was really helpful!
For anyone in a similar situation in Canada, According to CRA rules when you receive gifted securities, your “cost base” should actually be the fair market value on the date you received them. So it’s important to get that number right for tracking capital gains.

In Portfolio performance I did an “inbound delivery” on the gift date and entered the fair market price per share I found on that day. If you ever need to look up historical prices for Canadian securities, I found this tool useful https://thecse.com/trading/market-data/

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Hello, i reply here instead of creating another thread.

I have a situation (which can be common in France dunno about others countries), where as part of annual profit sharing, i can invest my share in my company stock (those would be recorded as Buy operation). Now if i keep those share for 2 years and i’m still an employee i get the same amount of shares (for “free”) as i invested in 2 years ago.

So for instance in 2020 i used my profit sharing to buy 10 company shares, in 2022 i will receive 10 additionnal company shares for free.

In that case those 10 additionnal shares contribute to the performance (ie. its like i bought 20 shares at half price) and thus it doubles the actual portfolio performance.

In PP, if i enter the gifted stock as Inbound delivery, the portfolio performance doesn’t change (or very slightly).

Am i missing something ?
Thanks !

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Hey Nicofr,

Even though you think you have to put in the shares with a purchse price of zero, in fact you have to put in those “gifted” shares with its actual value at the day of inbound delivery. PP does not care where the money comes from to purchase the shares, PP tracks securities or conglomerates of securities (=portfolios).

Maybe following thought experiment helps: Imaging you get shares for just being with the company, i. e. not necessary to own own stocks. What would the performance be of those stocks if you would purchase them for a price of zero?

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Hello Harry,

For this specific transaction it would be a kinda infinite performance. But in the example i gave, those shares are not free per se because of the initial investment. From a performance perspective, it would be similar i believe to receiving all the shares at half their market price. Its not the same as inheriting some securities.
I saw in another thread here that people tried to workaround this use case by creating a dividend and a buy action of same amount for the added shares. But this breaks the dividend indicator (or is it possible to “hide” this dividend somehow?). I’m just starting testing PP :slight_smile:

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It does not matter if you do not have other shares of that security or if you have. Where should be the limit? Having one, getting 1000?

Everything other than booking those “free” shares with its actual value is wrong. There are a lot of fellows here who do different things to cheat on themselves. Don’t be tricked by your gut feeling.

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I think it does matter. What i’m looking at when following investment is to understand & track what is the performance of each euros invested.

If i invest 100€ and 2 years later i look at this investment and see its worth 200€ i would expect to see a +100% performance indicator over the period right ?