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Return of Capital should not be "Not Categorized" transaction (20 Legacy Votes)

Joseph Arden

Currently, Return of Capital shows up as a Not Categorized transaction. This is a problem when running and Income/Expense reports as I don't want to see Return of Capital as Income... It's not income! It's converting one asset to another asset. I could run the report excluding Not Categorized transactions but I actually want to see Not Categorized transactions in my report. Instead, it would make most sense to either allow the user to categorize Return of Capital transactions OR auto-categorize as a different category (e.g. "Return of Capital"). This way a user can exclude "Return of Capital" and still see all Not Categorized transactions.

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Investments

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Add/Edit Transactions

Windows

Reviewed

Status: Reviewed

Comments

q_lurker

Seems to me a "damned if you do, damned if you don't" conundrum. That is, if you create a new 'category' for those transactions, the category will be either an income or expense category, and as you noted, Return of capital is neither. All Quicken categories fit the income/expense mold, so that does not seem to be a solution to me.

My workaround would be to use a suitable keyword in the memo field. I commonly use RtrnCap transactions for bond premium amortization, and those transactions always include the keyword 'amortization' in the memo field. I can eliminate those transactions from a report by customizing the 'categories' tab of the report and choosing to exclude those transactions using the leading tilde ~ on the keyword for the memo field. See pic.

"Amort" in the "Memo contains" field would report only those transactions.
"~Amort" in the field excludes all such transactions.

HTH

mshiggins

Just pointing out this is a QWin solution. I'm not sure QMac even has a Return of Capital transaction type and if so, how that transaction would be presented in reports.

Joseph Arden

That is why I created this as an "Idea". It's not perfect, however, if Return of Capital was always categorized as "Return of Capital", then I could create a permanent Income/Expense report that excludes that category. Of course, if Quicken "auto-categorized" Return of Capital transactions as "Return of Capital", then they could default the Income/Expense report to exclude that category.

Your work around is fine... in the end, it's still a workaround and requires me to ensure I correctly add a memo to ensure it works. Good for short term, not so good for long term.

Joseph Arden

Also.. thanks for quick response!

John_in_NC

There is a Return of Capital transaction type. One question: do you allow it to use the Description: Investment:Return of Capital? (That acts as the category field. I don't know if you have the Description column showing, but it should default to that. That category isn't set to income or expense.

If you do this, you should see the ROC transactions on things like your category summary reports.

Joseph Arden

I am using the Return of Capital transaction Type. There is a memo field available which does not affect the categorization. Basically, I just want to be able to assign a valid category to a Return of Capital transaction. This way I can choose to include or exclude the transaction from various reports. For example, on the Cash Flow report, Return of Capital transactions show up as Uncategorized INFLOWS. This means the transactions are bundled with other uncategorized transactions. I don't want this. I want to unbundle Return of Capital transactions.

q_lurker

I believe the original comment was Windows based. How that consideration applies to the Mac side, I have no idea. In principle, the two should be parallel in this aspect (or so it seems to me). But I would not force that into the Idea presented at this time.

(IMO, this discussion should have only been categorized in this forum to the Win Investment side. But that too is my reading between the lines.)

John_in_NC

It got categorized as a Mac investment question. Whether or not it should be, I now don't know.

Joseph Arden

You are correct. It is window based. I am assuming the problem is independent of Mac/Win and, regardless, the idea should apply to both platforms.

q_lurker

I would not assume that QMac reports the transactions in the same style that QWin does as evidenced by John's one-line example. That is, QMac may not demonstrate the same anomaly as QWin does with respect to lumping RtrnCap transactions with other Uncategorized transactions. If QMac behaves differently, the Idea may not apply to that version.

M C Crockett

Perhaps, I'm doing something wrong as all my Return of Capital type transactions in QM2017 have their Description and Category fields set to "Investments:Return of Capital". This is a "Required" category in the Categories List and does not have either the Expense or Income selectors set.

QM2017 does adjust the cost (tax) basis of the shares held albeit incorrectly when the Return of Capital dividend is reinvested in the security. QM2017 includes the shares that were acquired with the Return of Capital dividend to calculate the per share Return of Capital. The gains and losses reported in Portfolio > Realized Gain and Schedule D of the Tax Schedule reports are wrong as a result.

"Investments:Return of Capital" never appears in the Category Summary report even after you have selected it to be included. If selected, it will be reported in a Category Comparison report but will only be included in the Other section of the report as it is neither an Expense or Income.

Of course, I may have developed a habit of setting "Investments:Return of Capital" in the Description or Category field when I learn that a dividend is a Return of Capital or import my QWIN data into QMAC as part of my review process. I'll have to wait until the end of January when my next dividend is due to find out.

Quicken Anja

Hello All,

The Community Support team regularly reviews long-standing posts and Ideas for relevancy and current interest. This Idea seems to have stalled and we would like to gauge the current interest in this request.

If you would like to see this idea implemented, please add your vote and a comment explaining how this idea would be beneficial for you. More information, including steps to vote and how to submit your own Ideas for future product features/improvements, is also available

here

Thank you,

Quicken Community Support Team

tgrantdavis

This issue is a very significant problem that has been reported by many users for at least 6 years.
The problem has been clearly defined.
It corrupts our tax calculations in two areas: basis and dividends.
Quicken development, please fix this.
Please.
I don't find any way to vote for this issue.

Quicken Anja

Hello @tgrantdavis,

You can vote on this Idea by clicking the up arrow located below the vote count (see example below).

Hope this helps!

tgrantdavis

Thanks. I got it now.

mshiggins

The following comments pertain to Quicken for Windows.

As I understand the problem, users are saying that Return of Capital transactions are affecting the amount of Uncategorized Income in Quicken reports (Income/Expense reports per the original poster).

I was curious; I've only had one Return of Capital transaction in 25+ years of Quicken transactions and I was pretty sure it never affected Income reported by Quicken. So I did a bit of testing.

I'm not seeing the problem reported here. I'm running Quicken Subscription R56.9 (I also tested in Q2013, with the same results as R56.9): I don't see the amount of Return of Capital being included in the Uncategorized amount in the Income or Expenses section of Reports > Spending > Income and Expense by Category report or Reports > Banking > Cash Flow report. I also don't see Return of Capital in any reports found at Reports > Tax.

I took a quick look at Planning > Tax Center and found no Return of Capital reported there either. The Home tab widget, "Income vs. Expenses" showed no Return of Capital transactions either.

Perhaps someone experiencing the problem can provide some more detail that might help. A specific Quicken report showing the problem (if possible, include portion of transactions showing Return of Capital that are displayed when drilling down on Uncategorized. And if Return of Capital transactions appear in the drilldown, verify that their amount in included in the report "Uncategorized" amount.

[In my testing I experienced an inconsistency, which I have not been able to reproduce. In one or more of my tests, I found Return of Capital transactions listed in the Uncategorized drill-down - but those amounts were NOT included in the Uncategorized amount (as one might think they should). Now I can no longer reproduce that result: all my tests now show NO Return of Capital transactions in the drill-down of Uncategorized.]

[Note: I see no need for Quicken to provide a category for Return of Capital transactions. Quicken can easily exclude those transactions from any report since the Action value of "RtrnCap" is part of every Return of Capital transaction. It appears to me that is what Quicken is doing now in the aforementioned reports/displays. And the user can do the same thing in the Customize dialog of several Investment reports.]

-JP

NotACPA

I just ran an Investment Transactions report for October 2014, the only time that I had a RtrnCap transaction.

It DID show an "Uncategorized" line …but when I clicked on that line it was empty.

BUT, I don't see what the issue is. RtrnCap, itself, isn't an Income, Expense or Transfer item … it merely adjusts the Cost Basis of a security when is reflected when the security is sold.

I think that Q is doing things properly.

And @tgrantdavis is going to need to explain how the RtrnCap, by ITSELF, impacts dividends.

tgrantdavis

I know that at least one of the bugs for RtrnCap remains. This is complex, and there may be others.
From this previous post: "I have recently noticed (QW2014) that if I edit a Div transaction to make it a RtrnCap transaction, then the transaction retains its original _Div status. This is an error on Quicken's part. My workaround has been delete the original Div transaction and enter a new RtrnCap transactions. "

https://community.quicken.com/discussion/7479192/return-of-capital

Try that. Enter a dividend transaction with $1,000,000 to find it easily. Edit the transaction to RtrnCap. Look at a Tax Schedule report covering that account and time period. It will be listed with Dividend Income. Look at the Net Worth report, and it appears as an increase. In the Portfolio Value & Cost Basis report, it seems to be correct now.
That is what commonly has happened to me for many years because Fidelity and eTrade erroneously download return of capital as dividends. It also happens sometimes with recharacterizations.

NotACPA

SO, it isn't the RtrnCap that impacts Divs … but your editing of the transaction.

And it's been so long since I've had a RtrnCap that I don't know, and really can't determine, what Fido downloaded.

Jim_Harman

There are many situations where editing an investing transaction to make it a different type causes problems. In these cases as you have found, the solution is to delete the transaction and re-enter it with the correct type.

tgrantdavis

I have 29 of these a month. Re-entering is a real pain. The software is supposed to do it.

NotACPA

If your brokerage is downloading these as Divs … you need to complain to them.

Q SHOULD NOT muck around with what's downloaded … because the odds of getting it wrong are astronomical.

tgrantdavis

There are two problems in this.
I have spent many hours over several years working with Fidelity to try to fix Return of Cap downloads. They say it's a Quicken problem going through Quicken servers, and that Quicken refuses to help them. It is a typical two-way finger pointing problem. I think that Quicken should take responsibility to help institutions get things right. But they haven't, so that leaves me editing or hand-entering a lot of transactions.
Secondly, that is no excuse that editing a transaction screws it up. That is unquestionably a Quicken problem. Recharacterizations and such happen.

NotACPA

Which FI name are you using for Fidelity? If, Fidelity Investments (view this in TOOLS, Account List) you can review the OFX log to see what Fidelity sent. HELP, Contact Support, Log Files, OFX Log.

Save it to your desktop, open with WordPad or NotePad (NOT MS Word) and search for the dollar amount, which is probably sufficiently uniquel that it should be pretty easy to find. Near that amount will be the action that Fidelity sent, since using Direct Connect (Fidelity Investments name) THEY are solely responsible for the content of the download.

Also, explain how Q is supposed to know that it's a RtrnCap and not really a Div.

tgrantdavis

The Institution is: "Fidelity Investments"

The header is:

One of the transactions:
<INVBANKTRAN>
<STMTTRN>
<TRNTYPE>DEP
<DTPOSTED>20240415000000.000[-4:EDT]
<TRNAMT>+00000000000028.6000
<FITID>Z0534192110601420240415
<NAME>PRINCIPAL PAYMENT
<MEMO>PRINCIPAL PAYMENT
<CURRENCY>
<CURRATE>1.00
<CURSYM>USD
</CURRENCY>
</STMTTRN>
<SUBACCTFUND>CASH
</INVBANKTRAN

NotACPA

So, Fido is sending it as a Deposit, and neither a RtrnCap NOR a Div … and Q's taking a guess.

How does it show on your monthly statement?

tgrantdavis

You are mostly right. I mis-spoke. These appear in as deposits, so Quicken is not changing anything.

04/15 FEDL HOME LN MTG CRP POOL #G18681 3.00000% 03/01/2033
3128MMXK4 Principal Payment - - Total Cost Basis 28.41 - Amount 28.60

I do appreciate your help. Do you think this can give any guidance to Fidelity that they can fix it?

q_lurker

The OFX standards (page 466) do seem to provide for a Return of Capital transaction.

I don't know have any experience with Quicken handling any such transaction.

I am also not clear from the Fidelity report (?) if the actual RtrnCap is 28.41 or 28.60 or what to make of that $0.19 difference. I understand those pooled mortgages can be difficult to keep straight in both transactions and valuations.