Long / Short Term Capital Gain

rmweiss12

Perhaps this has been asked before but I could not find a good explanation.
Under Transactions, Is "ReturnofCapital" the same as a Capital Gain distribution?
If not, how best to enter Long or Short term Capital Gain of a security?
If I use ReturnofCapital, the cost basis is reduced. But for Capital Gain on a Money Market Fund (Core Cash), for example, Cost Basis does not apply but I still see the negative amount in the TransInfo tab.
Can you clarify please. Thanks as always.

VidasMatelis

There 2 types of transactions that deal with Capital Gain distributions:
NotionalDistrib - Notional Distribution - Capital Gains Increases Book value!
ReturnOfCapital - Return of Capital - Decreases book value!
You should use the above TransTypes just when the cost basis will be impacted. If cost basis is not impacted, then, I believe, you should use Div or DivTA to record distributions as regular dividends.

rmweiss12

The Mutual Fund is paying a LT Cap Gain in a certain amount of shares which are automatically re-invested. The share count increases and, I assume, the book value as well.
It seems I can account for this transaction best to use DRIP. When I use NotionalDistribution I can only specify total amount received but not the number of shares received so the share count is incorrect.
What do you think?

VidasMatelis

I would recommend not using DRIP, but instead enter 2 transactions for the same symbol at the same date:
DivTA - total amount of distributions/dividends received
BuyTA - amount of shares bought
That is what I do for my DRIP transactions.

rmweiss12

I see. Any particular reason for NOT using DRIP?

VidasMatelis

The main reason why I do not use DRIP is because DivTA/Div + BuyTA were more tested transaction types, so less likely they will have any calculation issues.