Additional information in transactions

Roadmap Proposals
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1

In the case of US and state taxes, dividend income is often classified multiple ways, with a combination of splits (e.g qualified vs unqualified) and subsets (exempt interest dividends vs specified private activity bond interest dividends or foreign tax paid vs local tax paid). These values are needed when calculating tax burdens.

Currently, this additional information can best be included by duplicating the dividend transactions as splits (e.g. a 1.00USD dividend becomes a 0.50USD dividend with a tag indicating it is qualified).

Ideally, allowing additional data fields on transactions to be added dynamically that can then be referenced in a tax preset would allow for more detailed tax calculations and tracking.

2

In case of US taxes, is there a finite set of rules on how to tax a dividend sale? Like for example qualified is always 50% or up to a limit?

If yes, then a t least a temporary solution would be allowing applying multiple taxes in a preset and to use tax for this logic.

3

US Tax accounting is pretty complicated, as most of this information is only provided by the brokerage at end of year (though Fidelity tries to provide YTD tax information).

Qualified dividends are taxed as long-term capital gains, compared to non-qualified dividends as regular income (similar to short-term capital gains).

For normal equity (e.g. a share in a company), this often means the whole dividend is either qualified or not (A dividend on a stock is qualified generally if the stock is held more than 60 days in a 121-day period that began 60 days before the ex-dividend date). I managed to simply tag the dividend transaction as “tax/ordinary_dividends/qualified”, so the tax preset can change the tax group and tax applied accordingly.

Issue is, ETF and Mutual Funds will provide a dividend payment that is the combination of the underlying assets, so a dividend of $100 might be $30 qualified and $70 non-qualified.

Currently, I go back and “split” the dividend, but I suspect that could cause issues, and is not yet very ergonomic.

It gets more complicated when dealing with other parts, as some dividends may be completely exempt in one tax context (like income from municipal bonds in a mutual fund like Fidelity’s FUENX is federal tax exempt, but not state tax exempt).

Foreign tax credit in the US is another example. For example, a dividend of $2.00 with $0.80 withheld as foreign tax paid is considered $2.00 of income, but a potential $0.80 tax credit on the end tax (the $2.00 affects the tax rate, but then the credit is applied after).

There’s definitely a lot of room for US tax tracking to be more exhaustive, and the current feature-set of Capitally has been useful for viewing a worst-case tax burden, but reviewing historical tax rates and strategy is limited at the moment.

P.S.
Loving this tool, especially coming back to it a year later (feels like it is at the right spot now).

4

Also, when combined with separate tax presets for different countries (or state/local tax presets), the tax paid may also need splitting to account for which tax burden the tax paid covers.

5

Might be very tricky to keep this simple and well integrated. Probably it would also be best if one can import such a year-end statement in bulk.

In general sounds like it needs custom fields and taxonomies, but maybe there’s a good middle ground.