Journal entry advice

spanky280 · 06-07-2006, 07:31 AM

I am working on a tax return and pretty new too it but here is my question

Unrealized gain on stocks 2004 were $123,545
Unrealized gain on stocks 2005 were $ 68,352

What would the dbit and credit be with this change.

I would appreciated anyones help

Abdur.Rehman · 06-07-2006, 08:11 AM

Gains and losses not realized are not considered for tax purposes. only realized gains and losses are considered. Tell me if u r asking for accounting purposes

spanky280 · 06-08-2006, 08:01 AM

Yes i am talking for accouting purposes. It would be some kind of M-1 adjustment

I was thinking it would be a loss on books not included on tax return

Since the unrealized gain went down i thought it would work like this 68,352-123,545= -55,013 loss reported on books not on tax return M-1 adjustment

Abdur.Rehman · 06-08-2006, 03:56 PM

Well the unrealized gains and losses arise when u carry ur Financial Instruments i.e. investments etc. on their fair value. so the entry for that is quite simple i.e. Investment debit and unrealized gain credit, or Unrealized loss debit and investment credit.
But i think that u shud make ur situation clear by giving more details, if the above mentioned doesnt serve ur purpose.

Goodman · 06-26-2006, 04:43 AM

[code] Gains and losses not realized are not considered for tax purposes. only realized gains and losses are considered. Tell me if u r asking for accounting purposes
posted by Abdul Rehman
[/code]
Wrong information.

It is possible to extract tax on unrealized gains. A good example is PGS (Planning Gain supplement). If the owner is successful in obtaining a planning permission to say convert a residential property to commercial one, the uplift in value though not realized is subject ot PGS and a tax return is due.

Abdur.Rehman · 06-26-2006, 05:32 PM

Well Mr. Goodman i still hold my stance...
ur above mentioned example needs some clarity.
plz explain it, or it would be better if u can quote anything from the income tax ordinance, 2001. As per my knowledge there is no such thing in the income tax ordinance, 2001 or rules thereto.
I would like to increase my knowledge in this regard.

Abdur.Rehman · 06-26-2006, 05:56 PM

Moreover, this question was asked regarding stocks or investments by spanky280. It would be very kind of u if u can give me an example in that regard as well, with reference to ITO, 2001. But first explain ur given example.

Goodman · 06-26-2006, 06:32 PM

you continue to hold your stance and obtain a good PI cover in future. The example is clear enough and the rest of the research I leave to you.

Abdur.Rehman · 07-01-2006, 04:40 AM

Sir u argued on my comments
i want u to quote it from Pakistani Tax Laws
i have quite some grip on Pakistani Tax and i was unaware of this issue.
If u dont give me the specific reference, i wud consider my comments as right.
and Mr. Spanky 280 i wud also request u to stick to my opinion if Mr. Goodman doesnt give a specific answer.
becoz as per my knowledge there is no such thing in Pakistani tax.
and specially after the latest amendments in property income, every income from property is subject to deduction of tax @ 5%. And tax planning is not much practical in Pakistan also.
But still i want to increase my knowledge, if Mr. Goodman has something concrete and solid on it. Otherwise he can not quote the words "wrong Information"

Abdur.Rehman · 07-02-2006, 08:19 AM

agar kuch pata na ho to khamkha bola na karain....
it is very easy to say someone's knowledge wrong but quite hard to prove.
come with something if u have

Pracs · 07-02-2006, 08:41 PM

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by Abdur.Rehman
 Sir u argued on my comments
i want u to quote it from Pakistani Tax Laws
i have quite some grip on Pakistani Tax and i was unaware of this issue.
If u dont give me the specific reference, i wud consider my comments as right.
and Mr. Spanky 280 i wud also request u to stick to my opinion if Mr. Goodman doesnt give a specific answer.
becoz as per my knowledge there is no such thing in Pakistani tax.
and specially after the latest amendments in property income, every income from property is subject to deduction of tax @ 5%. And tax planning is not much practical in Pakistan also.
But still i want to increase my knowledge, if Mr. Goodman has something concrete and solid on it. Otherwise he can not quote the words "wrong Information"
<hr height="1" noshade id="quote"></blockquote id="quote">

Abdur Rehman what makes you think, spanky wanted it all in the Pakistani prespective. !! he is in the US and I presume there may be some options under US Tax laws... as there are under UK Tax laws ! (as pointed out by Goodman) perhaps SPANKY here can clarify that !

Is that a thought then ?

insaan · 07-03-2006, 05:49 AM

as far as income tax treatment as per income tax ordinance 2001 pakistan
abdur rehman is quite rite

as gain = consideration received - cost (s-37)

look charegability is on receipt basis , not on receivable basis

thus gain chargeable on realized basis , not realizable basis

so looking this way goodman treatment isn't correct
however if he is talking about any other country's tax rules he should mention it

and for spanky280 , he should 4 sure stick to US laws ,as US laws stand unique

Abdur.Rehman · 07-03-2006, 06:35 AM

@Mr. Pracs
sir, this is accountancy.com.pk, but this argument may not be professional.
Everyone was asking questions on the tax forum regarding pakistani tax laws, so i presumed it.
But i accept my mistake in this regard. I shud have asked spanky regarding that.
But the way Mr. Goodman attacked me with words "wrong information" was really shocking for me. I think he shud also have mentioned that he is talking of UK laws. Can u deduce from any word of Mr. Goodman that he is talking about UK law. and when i asked him to quote it from Pakistani law, he again didnt clarified the issue.
So we both were on mistake. we shud have asked spanky.
But i was really disappointed from the words of Mr. Goodman. I request him to be soft in future, if he wants me to be soft.
So, Mr. spanky ur query is solved if u r talking of Pakistani law.
"no unrealized gains and losses r accounted for tax purposes in Pakistan"
If u r talking of any other country plz specify. I know a tax consultant in USA. I can ask him for u. But it depends on the state u r in. anyways plz clarify the issue.

Pracs · 07-03-2006, 08:12 AM

Since, Goodman is talking about PGS and PI I deduced it to be UK,.. again I could be wrong on this.

I hope Spanky visits this thread again, to confirm our hypothesis..!!

Abdur.Rehman · 07-03-2006, 09:32 PM

But sir i heard this term for first time. But despite that i didnt say him anything except asking for a specific reference from Pakistani Law. Anyways thanx to Goodman for increasing my knowledge.