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Cost Basis for Cash in Lieu - Brokerage vs Accountant vs Quicken

Geobrick Member ✭✭
edited May 2018 in Investing (Windows)
Is there a way to sell a fractional share and not have quicken apply a proportionate cost basis to the fractional share (removing the amount of the proportional basis from the cost basis of the remaining shares.

I believe Quicken is doing the right thing however several brokerages and accountants take a different approach and just assume a $0 cost basis for the fractional share. This results in a mismatch between the cost basis shown in Quicken and what's shown as the basis in the brokerage statement. Over the years, after several corporate events resulting in fractional shares, the numbers will drift further apart. Is there a setting in quicken to prevent quicken from applying a proportional basis to a fractional share or is there a manual way to do this?   


  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited May 2018
    No, there is no such setting to change.  Your brokerages and 'accountants' are doing it wrong (IMO), however they (and you) can get away with that 'wrong' approach since you will make up for the difference in future transactions and the current amount is small.  As they are handling it, you are reporting more capital gains now and thus you will be reporting less capital gains later when you sell the remainder of the shares.  

    There is no 'clean' way to process that cash-in-lieu sale the way the brokerage is doing it.  You would have to enter several transactions that would boggle your mind later trying to figure out what you did.  For example, if the fractional shares amounted to 0.48 shares with a real (Quicken) cost basis of $10, you could enter a Remove Shares transaction removing 0.96 shares with a cost basis of $20, followed by an Add Shares for 0.48 shares cost basis $0 and an Add Shares for 0.48 shares cost basis $20, then sell the $0 cost basis shares for the cash-in-lieu amount.  You are left with most shares with the real cost basis and 0.48 shares with a doubled cost basis.  Other variations of the same style would also work, and all would be confusing later on (e. g. Remove 100.48 shares, Add 100 shares at an increased basis, Add 0.48 shares $0 basis, Sell 0.48 shares).

    To bring your Quicken data into agreement with your brokerage data after the proper (Quicken) cash-in-lieu sale, you can enter a Remove Shares transaction followed by an Add Shares transaction with the cost basis increased accordingly.  Somehow, that after the fact adjustment is more palatable to my senses.    

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