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Difficulty understanding a corporate security spin-off and reversing error in recording.

Michael DetjeMichael Detje Member ✭✭
edited May 2018 in Investing (Windows)

Entered a Corporate Security Spin-off dated June 15 2016 for CNQ (Canadian Natural Resources) spin-off of PSK (PrairieSky Royalty Ltd.).  In error I entered the number of shares issued not the "ratio" of number of shares issued (flaw in Quicken description noted subsequently).  Challenge is to reverse this transaction as Quicken has gone back to initial purchase of CNQ and recorded a 128:1 share spin off of PSK as well as every purchase since that 2010 purchase.  Reversing this transaction seems quite cumbersome.  Do I need to delete 15 transactions?

I am unclear why Quicken back dates a security spin off?  We enter the cost basis to split but I do not see this going back and issuing shares that did not exist in 2010 in the accounts.

Am I missing something here?  Should I manually do this spin off by purchasing PSK?


Comments

  • mshigginsmshiggins SuperUser ✭✭✭✭✭
    edited March 2017
    QWin or QMac?
    Quicken user since Q1999. Currently using QW2017.
    Questions? Check out the  Quicken Windows FAQ list
  • Michael DetjeMichael Detje Member ✭✭
    edited October 2016
    QWin
  • Michael DetjeMichael Detje Member ✭✭
    edited October 2016

    Have manually deleted history of the corporate spin off going back to 2010.

    thinking of using Return of Capital and then "investing in PSK" to get the appropriate reporting on a go forward basis.


  • q_lurkerq_lurker SuperUser ✭✭✭✭✭
    edited May 2018
    To undo the effects of a bad Corp Spinoff entry, you need to either a) restore the backup you made prior to entering that transaction, or b) delete the RtrnCap and the Buy Shares transactions generated (and backdated) for each lot you held.  
    I am unclear why Quicken back dates a security spin off?  
    I am, too, but it has been that way as long as I can remember.  Users have objected and the programming has remained.  

    My current preference would be to Remove all CNQ shares, then enter pairs of Add Shares for the CNQ and the PSK shares - one pair per lot, using the correct lot acquisition date and splitting the cost basis of that lot to the two Add Shares entries.  

    The RtrnCap entry can also have unintended consequences.  
  • Michael DetjeMichael Detje Member ✭✭
    edited May 2018
    Thanks.

    Have eliminated impact by adding shares of PSK via a Buy and using the RtrnCap entry to provide cash from CNQ shares.

    Not sure what are the "unintended consequences of RtrnCap entry" are.  Any hints on what I should be looking for?
  • Tom YoungTom Young SuperUser ✭✭✭✭✭
    edited May 2018
    I think that the most common error I've noticed with multiple RtrnCap transactions is basis issues whereby the total basis reported for multiple lots is correct but the lot by lot detail that's presented under "Holdings" doesn't come to that same total.  I've also had other issues, starting with one that I discussed years ago in the Usenet group dedicated to Quicken and others that I've posted about in the various "official" Quicken forums.  I've finally learned my lesson and simply don't use RtrnCap transactions, period.
  • q_lurkerq_lurker SuperUser ✭✭✭✭✭
    edited December 2016
    Tom Young said:

    I think that the most common error I've noticed with multiple RtrnCap transactions is basis issues whereby the total basis reported for multiple lots is correct but the lot by lot detail that's presented under "Holdings" doesn't come to that same total.  I've also had other issues, starting with one that I discussed years ago in the Usenet group dedicated to Quicken and others that I've posted about in the various "official" Quicken forums.  I've finally learned my lesson and simply don't use RtrnCap transactions, period.

    Tom's comments are consistent with my thoughts.  Recent Quickens have taken to deducting the RtrnCap cash from a First lot first concept - at least for portfolio views. The program used to distribute the RtrnCap cash across several lots, but even that had quirks to it and my not have followed IRS and accounting practices.  That allocation may or may not apply to cap gains calculations or actual sales transactions.  Bottom line for me became - I only use RtrnCap for single lot holdings and I watch cap gains information closely, even in those cases.  
  • q_lurkerq_lurker SuperUser ✭✭✭✭✭
    edited December 2016

    Thanks.

    Have eliminated impact by adding shares of PSK via a Buy and using the RtrnCap entry to provide cash from CNQ shares.

    Not sure what are the "unintended consequences of RtrnCap entry" are.  Any hints on what I should be looking for?

    Note that adding the shares via a Buy makes the holding period for ST/LT considerations start new with that buy for the PSK shares.  Normal US practice would be that those shares carry the acquisition date of the original CNQ shares.  As long as you do not sell the shares in the near term, you (Quicken) will be fine after a year.  If you do sell the shares sooner, Quicken will be telling you they were ST gainsl/losses while your broker may be telling you they were LT.  

    Only you can say if that is significant. 
This discussion has been closed.