Recently I was privileged to work with a client whose income came half from real estate rentals and half from stock market investing. After a series of QuickBooks accountants and bookkeepers had messed up his bookkeeping, it was like a tangled mess of hair. Different people had tried this and that way of tracking his stock market investments, none of which were successful.
QuickBooks is the ideal software for business, and property
rentals, so I recommended he leave that part of his business there. But I recommended that he switch
to Quicken to account for his stock market portfolio. Quicken is better suited for
stock market investments than Quickbooks. For example, one drop down choice in
Quicken includes "stock split". How else would you track that one
share became two shares, but the purchase price and brokerage fees didn't change?
What tax preparers want to know is date of purchase, # of
shares purchased, total cost, minus any brokerage fees. Even if you hold that
stock for years, decades, you still need this information when you sell for tax
purposes. Make a file for "stock purchases" to store the paper that
outlines the trade there. One advantage of Quicken is that if the stock pays dividends
and interest, you can see watch how profitable this stock is for you.
If I had to track stock market investments in QuickBooks, I would
use items and track it the way one tracks job costing. Each stock would be an
item, with additional items for brokerage fees, etc. The purchase would be
tracked as a purchase order, and the sale as a sales receipt or
invoice/payment. There is a job costing report to show profit. But once again I
recommend Quicken for tracking your stock portfolio.
