Posted by taxguru on January 28, 2007
Q:
Subject: Stocks
Kerry,
I have made the dividend entries as I understand your instructions. Of course the balance in QuickBooks does not agree with the balance on the statement for this account. Since I only pay tax on the dividend income, I assume this in not a problem.
A:
Most non-accountants are confused as to the proper way of handling reinvested dividends; so I thought your question was perfect for educating others.
If you are referring to the market value of the shares, you are correct that the stockbroker’s statement will not match the figures in your QB because QB is strictly a record of your cost basis, or what you have invested into the shares.
However, the dividend income reported by the stockbroker for the previous year should match what you have in your QB and is the most important way we have of double-checking the accuracy of the QB data.
Kerry
Follow-Up:
Kerry,
My dad just had his 88th birthday. He is a retired accountant so I thought you might enjoy seeing his reply.
He is much better on the computer than I am. He teaches classes at the senior center!
Thanks for sending Kerry’s reply. I am impressed with him and his explanation.
Your QB is more detailed and accurate, as he said.
Over the years I have become accustomed to the automatic steps taken by
Quicken and MS Money and forgot I ever used a General and other Journals.
In MS Money, my portfolio page shows in each investment the number of
shares owned, The total value as of the last entry date and the amount
of gain. This is a backward way to arrive at the investment cost, but
arrives at the same answer.
Posted in QB | Comments Off on Posting Stocks in QuickBooks
Posted by taxguru on January 25, 2007
I receive dozens of emails each week from people confused as to how to properly utilize a corporation; a very few of which I post on this blog. It was no surprise that, when I was invited to give a presentation to the Tri-Lakes Board of Realtors in Branson tonight, that this would be the topic. I rarely make live public appearances any more, but the chance to set 200 or so Realtors onto the right track was too tempting to pass up.
For those who can’t make it, I have posted the handout that I prepared for the attendees, using the TaxCoach Software templates.
I have another few pages of notes that I am assembling of major points I intend to cover. I will probably post those in the next few days, along with comments from the actual presentation.
Posted in Uncategorized | Comments Off on Working With Corporations
Posted by taxguru on January 25, 2007
It was well publicized that the big floods in DC last Summer forced IRS to close its World HQ for several months. I wasn’t aware that some nut-jobs took that temporary vacancy in DC to signify that IRS had moved much of its top brass to Costa Rica until I saw this piece from Snopes.com debunking that.
Posted in Uncategorized | Comments Off on IRS Moving to Costa Rica?
Posted by taxguru on January 23, 2007
Posted in Uncategorized | Comments Off on Use TurboTax and go to prison?
Posted by taxguru on January 23, 2007
I have seen actual cases where this has happened; estates have been eaten away over several years by lawyer fees. This usually happens when there is a lengthy probate because a living trust wasn’t used or one was handled incorrectly. The most common mistake I’ve seen is where a living trust is established, but no assets are ever transferred into its name, negating any ability it could have to avoid probate, which reduces more estates than the death tax does.
Posted in Uncategorized | Comments Off on Wrong Heirs
Posted by taxguru on January 22, 2007
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Posted by taxguru on January 22, 2007
As long he reports all of his income.
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Posted by taxguru on January 22, 2007
This obviously applies to Realtors, as well as to stockbrokers.
Of course, the fact that those of us in the so-called white collar professions (legal, medical, accounting) are said to be “practicing” probably isn’t much more reassuring to those who entrust their lives (legal, financial and actual) with us.
Posted in Uncategorized | Comments Off on Poor choice of name?
Posted by taxguru on January 22, 2007
From the latest issue of Intuit ProConnection:
How to Handle Last-Minute Deductions That Aren’t on Form 1040 – Includes sample client doc file on these extender changes.
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Posted by taxguru on January 19, 2007
Who’s the “good” guy and who’s the “bad” guy depends on the perspective.
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Tax Guru - Ker$tetter Letter 