Security Transactions

Buying Securities

To buy a security, click the button for the security type you wish to purchase then double click the buy option. Select the security from the list of pre-defined securities or click the new button to define a new security. After selecting the security or defining the security, choose the portfolio in which the new purchase should reside. Once you have chosen the security and portfolio, the Security Transaction screen will be displayed.

The security transaction screen contains the following information that is to be filled in at the time of purchase.

Data Field Description

Security Name: A command button on the top left of the screen is labeled with the type of the security to be purchased. Click on the command button change the security being purchased.

Portfolio: Click on the Portfolio command button to change the portfolio where the purchase lot will reside.

Option on Stock Put and Call options only. Click on the command button to select the stock to which the option applies. For example, you would select XYZ Corp. if you are purchasing a put or call option on XYZ Corp.

Purchase Information

Data Field Description

Purchase Date: The date you purchased the security or option

Number of Shares: The number of shares of the security being purchased. For bonds this is the number of bonds. For options, this is the number of shares covered by the option.

Cost: The total purchase price of security or option excluding commissions and fees.

Commission: The commission paid to a broker or dealer for purchasing the shares

Other Cost: Any other costs of purchasing the shares such as margin costs.

Total Cost: This is automatically computed as the sum of the principal, commission and other cost.

Cost Basis Computed – You may override this value.

In addition to purchase information, the security transaction screen also contains sales information. Note that this information appears only for the purpose of editing sale information after it has been posted using the Sell option.

Sales Information

Data Field Description

Date Sold: The date you sold the security or option

Gross Amount: The gross (total) amount of the sale. For stocks, this is the selling price times the number of shares.

Commission: The commission paid to a broker or dealer when selling the security.

Other Selling Cost: Enter any other taxes, fees or expenses associated with the sale of the shares.

Net Amount Computed – Gross amount less commission. Cost Basis Computed – You may override this value. Gain/Loss Computed – Net amount less cost basis.

Share Lot Notes – Version 6 has added a share lot notes field for recording additional information about transactions. This might include special information on how the shares were acquired (e.g., through a merger or spin-off), how the cost basis was computed or adjusted (e.g., stepped up basis from inherited shares) or other information that is helpful in tracking the shares.

Hint: When you receive dividends or capital gains distributions that are reinvested in shares of the same stock or mutual fund, use the Income menu to record the income then select “Yes” from the Income Reinvested dialog box to record the number of shares purchased with the dividend or capital gains distribution.

Selling Securities
To sell a security than you hold, click the button for the security type you wish to sell, then double click “Sell” on the transaction menu. Select the security to be sold then select the portfolio which holds the shares you sold. The Sell screen will then be displayed showing the total number of shares of the selected security that are held in the chosen portfolio.

Hint: If more than one portfolio is involved in the sale of a security the total sale must be divided into one sale for each portfolio. Alternatively, you may reassign purchase lots into a single portfolio prior to entering the sale.

The sell screen contains the following information.

Table V-4: Sell Screen Data

Data Field Description

Name: Click the command button to select the name of the security being sold.

Portfolio: Click the command button to select the portfolio that holds the shares to be sold.

Shares Held Computed – the sum of shares held for the specified security in the specified portfolio. This is the maximum number of shares that may be entered into the shares sold field.

Date Sold: The date you sold the security or option. Shares Sold The number of shares or bonds sold.
Gross Amount The gross (total) amount of the sale. For stocks, this is the selling price times the number of shares.

Commission: The commission paid to a broker or dealer when selling the security.

Other Cost: The total of taxes, fees and other expenses related to the sale of the security.

Sale Method MI supports IRS approved cost basis accounting methods for First In – First Out, Specific Identification, Single Category Cost Averaging and Double Category Cost Averaging. Select the method that applies to the sale transaction. Note – In the USA, cost averaging methods apply only to mutual funds and once you sell shares using a cost averaging method, all subsequent sales of that fund must use the same method.

Net Amount Computed – Gross amount less commission.

Cost Basis Computed – You may override this value. The computed amount is based on the selected Sale Method.

Gain/Loss Computed – Net amount less cost basis.

Notes This is any notes you may wish to record about the transaction. These notes are appended to any notes recorded for each share lot sold.

Sales Notes – This is any notes you may wish to record about the sales transaction. These notes are appended to any previously recorded notes for each share lot sold.

Short Sales
A short sale occurs when someone sells stock that they do not hold or do not want to transfer at the time of the sale. To obtain the stock for the short sale, the seller borrows identical stock from a broker to deliver to the buyer. At some later date, the seller must cover the borrowed shares either by delivering shares that he or she already owns or by buying the stock on the open market.

To record a short sale in MI, click the Stocks button then double click on “Sell Short.” Once the option has been selected, MI will display the Short Sale screen. The Short Sale screen contains the following information to be filled in at the time of the short sale.

Table V-5: Short Sale Data

Data Field Description

Stock: Click the command button to select the name of the stock being sold.

Portfolio: Click the command button to select the portfolio where the short position is to be held.

Short Sale Date: Enter the date the shares were sold short.

Shares Sold: Enter the number of shares sold short.

Gross: Enter the total amount of the short sale.

Commission: Enter the amount of the sales commission plus any additional fees you had to pay to borrow the stock.

Other Cost: Any other cost associated with the short sale transaction. Net Computed: Gross less Commission/Other Cost.

Once a short position has been opened by entering the information above, it will appear on reports as having a negative value (i.e., open short positions represent a liability since you owe the shorted shares to the broker you borrowed them from).

To cover or close a short position, select Cover/Edit Short Position and select the short position to be covered. The Short Sale screen will be displayed containing the information that was entered when the short position was opened. The following data must be entered to cover the short position.

Cover Short Data

Data Field Description

Cover Date: The date you delivered shares to your broker to cover the borrowed shares.

Cover with New Purchase: Select this command button to if you needed to purchase the stock to cover the short position. After clicking this command button fill in the rest of the information on the screen.

Cover with Existing Shares: Select this command button if you are covering the short position with shares you already own. After clicking this button, select the share lots and enter the number of shares from each lot that were delivered to cover the short position. Once you have completed your entries the balance of the information will be filled in by the program and you can click the Save button

Acquisition Date: The date the shares were acquired

Cost: Cost of shares sold

Commission: The purchase commission

Other Cost: Any other cost associated with the purchase of the stock delivered to the broker.

Total Cost Computed: Sum of the cost, Commission, and other cost

Cost Basis Computed: This value may not be overridden on short sales.

Gain Computed: Net less Cost Basis.