Our club received a K-1 from PowerShares (DBA). It lists
interest, Section 1256 gains and a distribution. The only
item showing in our broker account is the distribution.

My question relates to how to handle this in Bivio. I can
enter the interest as income. The section 1256 can be
entered as 40% short term capital gain and 60% long term
capital gain. The distribution is treated as return on
capital and that part is fine.

The bivio account will now not reconcile with the broker
account by the amount of the interest and the Section 1256
gain. I can enter a non-deductible expense to adjust the
account but I am still left with the fact that I think the
capital basis should be adjusted.

I seem to be going around my elbow to get somewhere. Is
there a better way or more correct way to do this ?

Thanks
Roy Williams

Rip West wrote:
> I'm not sure that I  can help you, but I am confused
> about one thing. Did you receive cash from PowerShares during 2007. If so, how
> did you handle that distribution. Seems to me it should have been recorded as a
> return of capital. Then you can enter your capital gains and interest with
> offsetting entries to return of capital. Will that work for you. If not, why
> don't you give us some figures so we can try to see what is going
> on.
>
> Rip West
> Saint Paul,
> MN

Thanks Rip

Distribution was $135 and was deposited to our broker
account. It has been entered in bivio as a return of
capital and I am ok with this part.

Interest was $63. This does not show up in our broker
account. I entered it in bivio as interest.

Sect. 1256 gain was $1327. I entered this as $530.80 (40%)
short term gains and $796.30 (60%) long term gains.
This should allow us to have the correct amounts for tax
purposes.

At this point our bivio account has $1327 + $63 = $1390 more
than shown in the broker account. I believe the difference
probably is built into the value of the shares.

I can make an adjustment to the bivio account by entering a
non-taxable expense of $1390 to balance the account.

However, I think the cost basis of our shares should be
adjusted also since we are pauing taxes on interest and
gains that were not actually distributed. Is this correct ?

Any help will be appreciated.

Roy Williams