GainsKeeper Press Release

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GainsKeeper Strengthens Tax Lot Accounting Offering With Key Tax Reporting Tools
Tools Solve Complicated Requirements of Both Funds and Indivdual Investors

Boston - 9/29/05

GainsKeeper®, a part of Wolters Kluwer Corporate & Financial Services division, announced today the addition of new tax reporting tools to its three industry-leading tax lot accounting suites - GKAdvisor™ used by funds, GKBrokerage™ for shareholders, and FundTax™ used by individual investors.

Mutual fund and brokerage firms generally must conduct tax reporting in a highly compressed time frame due to the short window between closing of year-end and deadline for communicating information to shareholders and the Internal Revenue Service (IRS). Errors in numbers reported to the IRS can result in costly penalties and damaged reputations. An automated solution designed to calculate key shareholder and investor tax figures allows professionals to spend significantly less time compiling data. Less time spent on the manual component allows for more time on value-added services.

Individual investors face many of the same challenges when it comes to calculating their gains and losses for reporting on their year-end tax return. 

"Our tax lot accounting suites offer an automated solution designed to calculate key fund and investor tax figures, allowing both professionals and individual investors to spend significantly less time compiling and attempting to make calculations based on tax-relevant data," said Sanjeev Doss, GainsKeeper director and tax counsel. 

The new additions to GainsKeeper's GKAdvisor, GKBrokerage, and FundTax tax lot accounting suites include:

  • Qualified Dividend Income (QDI)-QDI reporting includes calculation of the 61-day holding period requirement, foreign qualification, and domestic qualification. The reporting takes into account hedged positions and the reduction in holding period. Qualified dividends are taxed at 15 percent in most cases while non qualified dividends are taxed at ordinary income tax rates which can be as high as 35 percent; thus, incorrectly identifying qualified dividends can be extremely costly.
  • Dividends Received Deduction (DRD)-DRD reporting functionality is designed to calculate the 46-day holding period requirement; taking into account hedged positions and the reduction in holding period. Corporate investors can deduct 70 percent of DRD qualified dividends; while those not meeting DRD requirements must include 100 percent of the dividend in the calculation of income, meaning failure to calculate DRD dividends can result in over payment of taxes.
  • Dividend Tax Expense-Extensive shorting can cause significant compliance issues around the capitalization rules with failure to capitalize the payments resulting in the under payment of taxes and potential IRS scrutiny. The Dividend Tax Expense report automatically identifies payments in lieu of dividends paid on short stock closed within 45 days and capitalizes these payments to the stock's cost basis.

All reporting functionality is deliverable via a web interface with the option to receive reports in HTML, text, XML, PDF, and Excel format. 

About GainsKeeper

GainsKeeper, a part of Wolters Kluwer Corporate & Financial Services division, provides automated tax-based financial tools and services to the investment community. GainsKeeper Institutional Services (GKIS) provides application service provider (ASP) solutions for financial institutions, enabling them to offer sophisticated tax lot accounting services to their customers without incurring the high cost of building, maintaining, and housing the systems and operations necessary to provide institutional-quality service. GKIS (www.gkis.net) solutions-ranging from back-office outsourcing to fully integrated, Internet-based tools and services-are utilized by the brokerage, mutual fund, and fund administration industries.

Wolters Kluwer is a leading multinational publisher and information services company. The company's core markets are spread across the health, tax, accounting, corporate, financial services, legal and regulatory, and education sectors. Wolters Kluwer has annual revenues (2004) of €3 billion, employs approximately 18,400 people worldwide, and maintains operations across Europe, North America, and Asia Pacific. Wolters Kluwer is headquartered in Amsterdam, the Netherlands. Its depositary receipts of shares are quoted on the Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.

 

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