How do I handle different tax lot accounting conventions?

There are two ways that tax lot accounting can be performed in LUSID:

  1. If you have a source system which provides specific tax lot ("versus purchase") details on all transactions then you can setup the Portfolio's sub-holding keys to segregate the Instrument-level holdings into separate tax lots.

  2. If your source system doesn't always provide tax lot information and you want LUSID to calculate tax lots based on a standard algorithm, you can instead configure this as part of the Portfolio setup process.

1. Using SubholdingKeys to segregate holdings into tax lots

Loading data into LUSID

  1. Define a custom property in the Transaction domain to store the tax lot identifier.

  2. Create a transaction portfolio with the property as the sub-holding key.

  3. Upsert transactions to the portfolio including a value for the property to indicate which taxlot to book each Transaction against.

Retrieving data from LUSID

Using this configuration, the GetHoldings and GetValuation APIs will return tax lots without any further parameters.

2. Having LUSID determine tax lots automatically

Loading data into LUSID

You can set the accounting method to either FirstInFirstOut, LastInFirstOut, HighestCostFirst or LowestCostFirst. More information on accounting methods.

You can set this for one of the following entities, or create a waterfall of logic by setting it for all three:

  1. On a transaction portfolio, using the accountingMethod field. The accounting method applies to every transaction in the portfolio.

  2. On a transaction type, using the TransactionConfiguration/default/TaxLotSelectionMethod system property. The accounting method applies to every transaction of that type in any portfolio, overriding the setting for a particular portfolio.

  3. On an individual transaction, using the Transaction/default/TaxLotSelectionMethod system property. The accounting method applies just to that transaction, overriding a setting for the transaction type and/or the portfolio.

Retrieving data from LUSID

  • The GetHoldings API has a parameter byTaxlots which indicates whether tax lot level information is required.

  • The GetValuation API returns tax lot level information if no specific grouping parameters are specified.