Quicken Community is moving to Single Sign On! Starting 1/22/21, you'll sign in to the community with your Quicken ID. For more information: http://bit.ly/CommunitySSO

Capital Gains Lot Assignment Bug

Unknown
Unknown Member
edited May 2018 in Investing (Windows)
I found/reported a bug with capital gains assignment.  I have been able to fix the Quicken data file as described below, but this has caused me tax problems so I hope that Quicken will address it in subsequent patches.  And this post may also be helpful to others.

What Happened:
I had numerous "bought" and "sold" transactions for a security over several years and when I sold all shares, I noticed that cumulative costs reported in Quicken Capital Gains report was incorrect.  I found I had under reported costs and over reported gains to the IRS, resulting in an increased taxes paid.  I traced it to a single purchase transaction in Quicken that was applied to several sales exceeding the share total.  I.E. I bought 500 shares in 2010 at a low price and found that lots of this transaction had been applied to numerous sale transactions exceeding 2000 shares.

Workaround Fix:
At first I tried to fix the issue using Quicken's File Repair, validate and rebuild investing lots.  This did not work.  I then tried to edit the lot assignments associated with the sale transactions, but while I could remove the assignment of the over applied purchase shares, I found the shares of other lots were missing or reduced.  I was eventually able to fix the data by deleting all sale transactions, then reentering them.  Now I just need to submit amended Tax forms for the past few years.

Suggestions for Quicken:
The Quicken support person I spoke to (case 00244663) suggested I post on this forum and perhaps a developer will pick up and address the problem.  I don't know how the internal lot assignment data became corrupted and why it was not fixed with existing utilities.  Assuming that can't be determined, perhaps the following can be done.
  1. Occasionally run a background check of transaction purchase quantities for an account/security comparing against the total shares assigned to sale transactions.  If the shares assigned exceeds the original amount (accounting for splits, etc), then notify the user that the lot assignments are corrupted.  If run regularly, users won't have the tax problems I am now faced with.
  2. Modify the "rebuild investing lots" to remove all sales transactions for the account/security, then re-apply the sales transactions.  I do not know what the existing lot reassignment does, but it does not work in my case.
  3. Finally, test #1 again to make sure no lots are over assigned.  If they are, inform the user that automated recovery could not address the issue.
Thank you

Comments

  • Reed Welch
    Reed Welch Member ✭✭✭
    edited February 2017
    I have seen similar problems. Quicken reporting for capital gains has been suspect since 2014, from my point of view. I regularly check what Q reports with that from my brokerage account. 
    With the the problems I have had with Q reports, I have deferred to what my brokerage account reports. I do this since I am able to inform them on what lots I have sold for tax purposes.
    FWIW - my tax consequences have been minimal between the two, but I trust the brokerage account, and that is what the IRS has on file.
    Hope this helps
  • Unknown
    Unknown Member
    edited November 2016

    I have seen similar problems. Quicken reporting for capital gains has been suspect since 2014, from my point of view. I regularly check what Q reports with that from my brokerage account. 
    With the the problems I have had with Q reports, I have deferred to what my brokerage account reports. I do this since I am able to inform them on what lots I have sold for tax purposes.
    FWIW - my tax consequences have been minimal between the two, but I trust the brokerage account, and that is what the IRS has on file.
    Hope this helps

    I agree that brokerage reporting is often preferable, particularly since in recent years they also report that same info to the IRS.  However, in this particular case, my brokerage did not have the detail to report the costs.  I still think Quicken should try to address the issue
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited May 2018
    I can empathize with your issue, but I encourage you to be realistic as well.  What you are describing cannot happen through "normal' operations.  Every time I have gone through the Sell Shares process manually or through accepting new downloaded transactions, I have always been offered only unsold lots to specify.  In my experience, the basic logic is in place and works.

    That said, I have created situations with bogus lot specifications.  Recently, I did this by having two sales entered that specified shares from two existing lots.  To make a cost basis adjustment applicable for those sales, I entered a Remove Shares and two Add Shares removing and re-creating the lots.  Somewhat predictably when I looked at the previously entered sales, their lot specifications were amiss.  

    File corruption through various circumstances could also some into play.  The validation routines are not robust with respect to investment account transactions.  I do not know specifically what is suppose to take place with the rebuild lots options, but my expectations are low.  I do not think the intent comes close to fixing your type of issue.  

    My bottom line is that the user does need to be cautious.  I routinely cross check my data vs my brokerage reports for capital gains issues.  discrepancies are rate -- for me.  

    Now as to 'fixing' a bug -- that would be fine if it could be identified.  What you have offered is far from sufficient to identify the bug.  You would need to be able to put forth what non-normal operation sequence you had been through to cause this rather massive overuse of a specific lot.  I doubt that it was as simple as my case I just cited.

    I would like to see some more cross-checking.  Again, to my type of example, give out a warning that the lots being removed (sold) were also used in a later dated transaction.  

    Your #2 suggestion with regard to rebuilding lots is a no-go for me.  Quicken cannot delete those sales and arbitrarily recreate them with some other 'fitted in' set of lot specifications.  Your suggestion #1 would be a positive step, but then let the user identify and take necessary corrective action.  
  • Unknown
    Unknown Member
    edited November 2016
    I agree with your point that having Quicken "auto correct" by removing and reentering sales transactions would be problematic, so I withdraw that suggestion.  I was trying find a means of reducing the manual correction effort, but cannot offer one.

    Having Quicken identify an over usage of existing lots would be beneficial and the sooner an over assignment is discovered,the easier recovery would be.

    Fixing the root cause would be preferable.  But unfortunately, I have nothing to offer there.
  • Unknown
    Unknown Member
    edited November 2016
    q.lurker said:

    I can empathize with your issue, but I encourage you to be realistic as well.  What you are describing cannot happen through "normal' operations.  Every time I have gone through the Sell Shares process manually or through accepting new downloaded transactions, I have always been offered only unsold lots to specify.  In my experience, the basic logic is in place and works.

    That said, I have created situations with bogus lot specifications.  Recently, I did this by having two sales entered that specified shares from two existing lots.  To make a cost basis adjustment applicable for those sales, I entered a Remove Shares and two Add Shares removing and re-creating the lots.  Somewhat predictably when I looked at the previously entered sales, their lot specifications were amiss.  

    File corruption through various circumstances could also some into play.  The validation routines are not robust with respect to investment account transactions.  I do not know specifically what is suppose to take place with the rebuild lots options, but my expectations are low.  I do not think the intent comes close to fixing your type of issue.  

    My bottom line is that the user does need to be cautious.  I routinely cross check my data vs my brokerage reports for capital gains issues.  discrepancies are rate -- for me.  

    Now as to 'fixing' a bug -- that would be fine if it could be identified.  What you have offered is far from sufficient to identify the bug.  You would need to be able to put forth what non-normal operation sequence you had been through to cause this rather massive overuse of a specific lot.  I doubt that it was as simple as my case I just cited.

    I would like to see some more cross-checking.  Again, to my type of example, give out a warning that the lots being removed (sold) were also used in a later dated transaction.  

    Your #2 suggestion with regard to rebuilding lots is a no-go for me.  Quicken cannot delete those sales and arbitrarily recreate them with some other 'fitted in' set of lot specifications.  Your suggestion #1 would be a positive step, but then let the user identify and take necessary corrective action.  

    I agree with your point that having Quicken "auto correct" by removing
    and reentering sales transactions would be problematic, so I withdraw
    that suggestion.  I was trying find a means of reducing the manual
    correction effort, but cannot offer one.

    Having Quicken identify
    an over usage of existing lots would be beneficial and the sooner an
    over assignment is discovered,the easier recovery would be.

    Fixing the root cause would be preferable.  But unfortunately, I have nothing to offer there.
  • mshiggins
    mshiggins SuperUser ✭✭✭✭✭
    edited March 2017
    I've had this occur one or two times - a lot gets marked as sold more than once. I don't know what caused it.



    Could it be as simple as selecting lots for sales in reverse chronological order?



    For example, you:


    Bought 100 shares on 1/12016


    Bought 100 shares on 2/1/2016


    Sold 100 shares on 10/1/2016


    Sold 100 shares on 11/1/2016



    Select the January lot for the November sale, then select the January lot for the October sale.
    Quicken user since Q1999. Currently using QW2017.
    Questions? Check out the  Quicken Windows FAQ list
  • Unknown
    Unknown Member
    edited November 2016
    mshiggins said:

    I've had this occur one or two times - a lot gets marked as sold more than once. I don't know what caused it.



    Could it be as simple as selecting lots for sales in reverse chronological order?



    For example, you:


    Bought 100 shares on 1/12016


    Bought 100 shares on 2/1/2016


    Sold 100 shares on 10/1/2016


    Sold 100 shares on 11/1/2016



    Select the January lot for the November sale, then select the January lot for the October sale.

    Knowing it would help Quicken correct the root cause, I spent significant time trying unsuccessfully to duplicate the problem.  It occurred at some point over the course of 4 years, numerous transactions, and a couple of Quicken versions.  There were some initial share transfers in, but no transfers out.  Then only Buy and Sell.  A few of the Buy/Sell occurred on the same day, so the lots assigned to the sell came from the buy.  The remainder were all FIFO.  I believe the assignment of lots to the sales were in calendar order, but it is possible that was not so.

    Since I could not replicate the issue, but have a "corrupted" file, I suggested Quicken provide the background reconciliation function.
  • Reed Welch
    Reed Welch Member ✭✭✭
    edited December 2016
    mshiggins said:

    I've had this occur one or two times - a lot gets marked as sold more than once. I don't know what caused it.



    Could it be as simple as selecting lots for sales in reverse chronological order?



    For example, you:


    Bought 100 shares on 1/12016


    Bought 100 shares on 2/1/2016


    Sold 100 shares on 10/1/2016


    Sold 100 shares on 11/1/2016



    Select the January lot for the November sale, then select the January lot for the October sale.

    I sympathize with you, since I am having similar problems with historical transactions. But I have come to the realization that Quicken has limited ability to assist. I say this since it has been sold. It appears that the original resources that may understand the issue are no longer available. Hopefully, there are folks within the user community that may be able to provide further insight.
    I have issues where a Net Worth and Portfolio Value for my investment accounts are not the same for the same date.
  • mshiggins
    mshiggins SuperUser ✭✭✭✭✭
    edited December 2016
    mshiggins said:

    I've had this occur one or two times - a lot gets marked as sold more than once. I don't know what caused it.



    Could it be as simple as selecting lots for sales in reverse chronological order?



    For example, you:


    Bought 100 shares on 1/12016


    Bought 100 shares on 2/1/2016


    Sold 100 shares on 10/1/2016


    Sold 100 shares on 11/1/2016



    Select the January lot for the November sale, then select the January lot for the October sale.

    What are you talking about? What leads you to believe Quicken Inc did not retain their key Quicken employees as part of the sale?
    Quicken user since Q1999. Currently using QW2017.
    Questions? Check out the  Quicken Windows FAQ list
This discussion has been closed.