Dave's Capital Gains Calculator Tutorial

Dave Hirschman, 8/26/23

Here's a quick tutorial to familiarize yourself with my Capital Gains Calculator. In this tutorial, you will create an Account Set, add a fictitious account that will hold gold, add three transactions (two purchases and one sale) to the account, decide which purchase to allocate to the sale, generate your capital gains report, and finally close the tax year. See the complete User Guide for more information.

Step 1: Create or Open Account Set or Cost Basis File

Start the Calculator
Click the New Account Set button.
For the Starting tax year enter 2012
Leave the Check if United States taxpayer box checked and click Submit.

Step 2: Create accounts and import transactions

First, create a dummy account that will hold gold grams:

Click the Add new account button.
In the Account name (venue) box, enter Acme Precious Metals.
Under What does this account hold? select Precious metal. Note that the Calculator also handles crypto and foreign currencies.
Under Type of Metal select Gold.
Under Metal weight select Grams.
Click the Create Account button.

Next, add a few transactions to the account.

Download this spreadsheet file of transactions to your harddrive someplace.
Click the Import ... button next to the Acme Precious Metals account.
Click the Upload transactions file button, and select the transaction file you downloaded above.
Now the account shows 40.3330 grams of gold at the beginning of 2012. During 2012, 37.659 grams were added, and 25 grams were removed.
Click Edit ... to view the transactions. There will be two purchases and one sale (for purposes of this tutorial, one of the transactions happened in 2011. Normally, you will only add transactions for the current tax year).
If you want, click the Edit button on one of the transactions, add some Notes, and click the Save button.
Click Finished at the upper right to return to Step 2.
Now we are finished with creating accounts and entering transactions. Click the Save button in the top navigation bar to save your work so far. Calculator save files have a file extension of ".cgc" (Capital Gains Calculator). If you want, click the Close to return to Step 1, and click Open Account Set to restore the Save.
Now you're finished adding account and transactions, so click Next > at the top right to go to Step 4 (you have no transfers between accounts, so Step 3 is skipped).

Step 4: Lot Assignment

This is the heart of the Calculator. Here you decide, for each sale, what product was actually sold. For this tutorial, you have only one account to allocate.

Click the red Assign Lots button. On the left you see your two gold purchases, and on the right, you see your gold sale. Now, you need to decide, which gold did you sell? The gold that you bought on 5/5/11, or the gold you bought on 01/09/12?
Click the Use button next to the 5/5/11 purchase. If you decide that you sold this gold, you would have a long term capital gain of $64.57 to report on your taxes as shown in the Capital Gains box.
Click the Undo button (near the top right) to back out that sale, and click the Use button next to the 1/9/12 button to sell that gold instead. Now you have a short term loss of $23.45.
Click the Undo All button to start over again.
In the Automatic Lot Selection box select the First method and click the Auto Allocate button. The Calculator provides several methods to automatically choose which lots to use for each sale.
Click the Finished button. If there were any other accounts, you would perform lot assignment on them as well.
Now you are finished with lot allocation. Click Next to go to Step 5.

Step 5: Generate Capital Gains Report

Click the Generate Report button and save your report (an Excel spreadsheet) on your harddrive.
Take a look at the generated spreadsheet. You'll need Microsoft Excel or other spreadsheet program. This is the output of the Calculator that you or your accountant use to prepare your form 8949 (or equivalent outside the USA). Presently the Calculator does not do any formatting, so it's a good idea to apply some currency formatting on the Proceeds, Cost Basis, and Gain/Loss columns.
Click Next > to go to the final step.

Step 6: Close Tax Year; Save Cost Basis

Now the information about the gold that was not sold needs to be saved for the next tax year. This is called the "Cost Basis" file, another Excel spreadsheet.

Click the Close tax year button, and save the Cost Basis spreadsheet to your harddrive.
After saving the Cost Basis spreadsheet, the Calculator is all set to begin the next tax year, 2013. But for this tutorial, let's pretend that an entire year has gone by and it's time to start preparing your 2013 taxes. Click the Close button, or restart the Calculator.
You are back to step 1. Click the Import cost basis spreadsheet button and select the cost basis file you generated above.
You should see your Acme Precious Metals (Gold) account, with the unsold gold still in it, ready for you to add new transactions that happened during the 2013 tax year.

Congratulations on finishing the tutorial! For more, see the complete User Guide.

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