An example for Stocks on MMEX (v2)

[Nickallington]

So for a simple buy, the transaction would be as follows, assuming the broker already had sufficient funds in his client account:

1. User decides to buy 100 shares in XXX at price 10, and instructs the broker accordingly
2. Broker buys shares for 1000, adds commission of 5% (50), purchase tax of 1.5% (15) and stamp duty of 4 (fixed rate). Total charge to user is 1069.
3. Broker reports the purchase via a contract note.
4. In MMEX, user debits 1069 from Boker account as follows:
a. 1000, payee XXX as share issuer (Category Investments: Shares: Purchase)
b. 50, payee Broker, for commission (Category Investments: Commissions
c. 15, payee government authority, for tax (Category Investments: Purchase taxes)
d. 4, payee probably also government, for stamp duty (Category Investments: Fees and duties)

You could do this the other way around, and say that User calls broker, and says to invest 1000 in shares of XXX, in which case he gets 93 shares in XXX, and pays 46.5 in commission, 13.95 in purchase tax, and 4 in stamp duty, for a total of 994.45, being the maximum he can pay within his instruction to invest 1000. The residual of 5.55 remains on the account (unless fractional shares apply).

What the user has to decide, based on his jurisdiction, is whether the 3 charges are permitted investment costs, and therefore tax deductible (a negative income), or whether they are not, in which case they go to a Category not included in his tax reporting output. And it may be that one or two may be deductible, but the third not. It is variable.

What does need to be clear is where the Commission as shown in MMEX is accounted, as that is an expense, whether tax deductible or not. It is not normally a reduction in asset value (though there are cases where it can be, and then it should be treated accordingly). I covered that in the draft Investments doc.

[MlinMMEX]

@Nickallington I like your approach. thank you for your explanation.

[guangong]

your case is great.
Commission in MMEX today supports this Fixed Amount buy (or Net Yuy) and the final purchased price would be $10.69. permitted investment costs, and therefore tax deductible as it is in the left panel so far...
Commission split is tbd.

Leaving the commission as zero might be a workaround to support the other way (Fixed Investment or Gross Buy), and the final purchased price would be $10.00.
additionally, the 3 charges would be tracked separately in the Investment Cash Ledger. NOT permitted investment costs, and NO tax deductible.

so two standalone tasks:
1. check Fixed Amount or Fixed Investment
2. commission split


@MlinMMEX and @Nickallington , how your country deal with #1

[guangong]

I just added deductible commission splits during sell/buy, hope this will address the detailed tracking usage.
with the development build, we can verify it.

Deductible_Comm.png

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