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Update municipal bond cost basis

unknown

How do I update a zero cost basis for a municipal bond in Quicken 2017 Premier for Windows?

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q_lurker

Please expand upon your question. How did you (in Quicken) acquire the bond? What transaction type? The bond currently shows a zero cost basis (in Quicken), or is it, in the real world for some reason, a zero cost basis bond that through some other events is developing a cost basis?

Tom Young

You should receive a 199-OID each year for the amount of interest you need to report on your income tax return. This "phantom income" - i.e., no cash is received - should be added to your original cost basis. (For simplicity I'm assuming that you bought the bond when issued.)

This link:

https://www.quicken.com/support/how-do-i-record-interest-and-increased-value-zero-coupon-bond

explains the process - record interest income and increase cash, record a return of capital and decrease cash in the same amount - and I've certainly used this method in the past.

However I just tried a test entry in a Quicken test file and couldn't get it to work UNLESS I used the "Enter Transaction" button to record the return of capital. If I tried to enter the return of capital transaction directly into the Account Quicken insisted on turning any negative amount I typed in into a positive amount.