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Capital gains tax report with brokerage treated as expense

Hi,

When purchasing securities, my current xero settings (through sharesight) treat brokerage as an expense, rather then adding it to the cost base. So i decided to try and reconcile xero account inputs with the Capital gains tax report under the reports page. However there is no option on the Capital gains tax report on share sight to treat brokerage as an expense as it seems to add it to the cost base when calculating capital gains tax. This is confusing me as the capital gains tax report on share sight is inconsistent with my xero entries. The resulting capital gains tax for the year on Xero is therefore different to Sharesights capital gains tax report. thanks
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  • I think the difference in your reports will be the amount of brokerage. Assuming you want brokerage to be included in the cost of investments In Xero you could journal that amount from Brokerage to Cost of Investments Account. Or edit the transactions in Xero that Sharesight has created to recode the brokerage component to the cost account. But that will break the link between the two systems.

    I would unreconcile the transactions in Xero. Change the Sharesight Xero settings to include brokerage in costs and then edit the Sharesight transactions to send the transactions back through to Xero now including brokerage in the cost instead of as an expense. I'd test it on one transaction first to make sure it was going to work.

    Tedious, particularly if there are lots of transactions but at the end I think both systems will be correct.
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  • thanks. i might just change the brokerage setting for going forward. do you know how to change the setting in sharesight to treat brokerage as expense or cost of investments?
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  • I always include brokerage in the cost of investments, never treat it as an expense so not aware of how to change how its treated in Sharesight or even if its possible. (Maybe if you set your tax status as "Trader"??.

    But I do know to send it through to Xero as included in the cost it's under Settings, Xero Settings, Edit Settings then check box bottom left "Include Brokerage" . Mine is always ticked.

    If yours isn't it will tell you there which account in Xero brokerage has been sent to.
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