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Problem with Quicken Capital Gains Report basis error

Joyce Drake
Joyce Drake Member ✭✭
edited January 2019 in Investing (Windows)
Windows 2015 Home and Business. Capital Gains report does not reflect correct cost basis of stocks purchased. Each purchase/sale has been checked against TD Ameritrade confirmations and entries are correct. Gross proceeds are correct. Gains/loss are incorrect due to wrong cost basis. Help!

Comments

  • K.O. (Win-Premier)
    K.O. (Win-Premier) SuperUser ✭✭✭✭✭
    edited October 2018
    Hi Joyce.  Apologies in advance as this is not going to solve your problem directly.  But I can provide some information to help you figure out what might be going on.  

    The problem could lie with the lot identification that TD is using when you close a trade vs the lot you identified in Quicken when you closed your trade.  

    The problem could reside in TD giving you commission information at the trade group level and not the individual leg level.  For example, if you buy and eventually sell an Iron Condor (4 legs) TD like to tell you the commission of buying/selling the Iron Condor instead of the commission for each leg.  So depending on how TD allocates the commission across each trade vs how you are allocating the commission across each leg when you enter the trades into Quicken.

    The problem could be related to certain types of trades that Quicken's Capital Gains report, frankly just doesn't handle correctly such as wash sales, section 1256 contracts, short sales, options that turn into stock via exercise/assignment.

    What you are going to need to do is just dig through the detail of each transaction related to the same security and find which specific transactions are at fault and then go into each transactions and find what is causing the problem.

    Best of luck.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited January 2017

    Hi Joyce.  Apologies in advance as this is not going to solve your problem directly.  But I can provide some information to help you figure out what might be going on.  

    The problem could lie with the lot identification that TD is using when you close a trade vs the lot you identified in Quicken when you closed your trade.  

    The problem could reside in TD giving you commission information at the trade group level and not the individual leg level.  For example, if you buy and eventually sell an Iron Condor (4 legs) TD like to tell you the commission of buying/selling the Iron Condor instead of the commission for each leg.  So depending on how TD allocates the commission across each trade vs how you are allocating the commission across each leg when you enter the trades into Quicken.

    The problem could be related to certain types of trades that Quicken's Capital Gains report, frankly just doesn't handle correctly such as wash sales, section 1256 contracts, short sales, options that turn into stock via exercise/assignment.

    What you are going to need to do is just dig through the detail of each transaction related to the same security and find which specific transactions are at fault and then go into each transactions and find what is causing the problem.

    Best of luck.

    OR, in simpler terms ... if TD chose FIFO for lot assignment, and you chose anything else, then the costs would differ.  Lot assignment is ONLY un-involved if you sell the entire position.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Unknown
    Unknown Member
    edited October 2018
    Ok, I did some number crunching and think I figured out what the problem is and have reported my findings to quicken.  I have a similar issue, as I had some funds that I needed to report capital gains to the IRS, and figured the capital gains report would save me a lot of time (NOT SO!)

    It appears what is happening, at least in my case, is that in the capital gains report, Quicken is using an AVERAGE COST BASIS number instead of the actual cost amount of my share purchases.  When I calculated that amount and multiplied that by the share amounts received from my dividend/reinvest transactions, then the cost basis numbers MATCH with what is in the capital gains report, and is TOTALLY INCORRECT!

    QUICKEN NEEDS TO FIX THIS WITH A PATCH ASAP!!!  THIS IS A LIABILITY, AS A USER COULD GET AUDITED BY THE IRS IF THEY TRIED TO USE THIS TO REPORT CAPLITAL AGAINS WITH INCORRECT DOLLAR AMOUNTS.

    It sounds like whoever programed this report used the average cost basis amount to cut down on calculation time, and is a case of really lazy programming.  It's a lot more complicated than that, as you have to calculate this for each transaction, factor in stock splits, etc.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited March 2017
    Parallox said:

    Ok, I did some number crunching and think I figured out what the problem is and have reported my findings to quicken.  I have a similar issue, as I had some funds that I needed to report capital gains to the IRS, and figured the capital gains report would save me a lot of time (NOT SO!)

    It appears what is happening, at least in my case, is that in the capital gains report, Quicken is using an AVERAGE COST BASIS number instead of the actual cost amount of my share purchases.  When I calculated that amount and multiplied that by the share amounts received from my dividend/reinvest transactions, then the cost basis numbers MATCH with what is in the capital gains report, and is TOTALLY INCORRECT!

    QUICKEN NEEDS TO FIX THIS WITH A PATCH ASAP!!!  THIS IS A LIABILITY, AS A USER COULD GET AUDITED BY THE IRS IF THEY TRIED TO USE THIS TO REPORT CAPLITAL AGAINS WITH INCORRECT DOLLAR AMOUNTS.

    It sounds like whoever programed this report used the average cost basis amount to cut down on calculation time, and is a case of really lazy programming.  It's a lot more complicated than that, as you have to calculate this for each transaction, factor in stock splits, etc.

    Average Cost basis is ONLY available for mutual funds ... not for stocks.
    So are we talking about mutual funds?

    And, you set the "Average Cost Basis" on when you created the security.  Click CTRL-Y, click to select the particular fund, click "Edit Security Details".  See the graphic
    image
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Unknown
    Unknown Member
    edited March 2017
    Parallox said:

    Ok, I did some number crunching and think I figured out what the problem is and have reported my findings to quicken.  I have a similar issue, as I had some funds that I needed to report capital gains to the IRS, and figured the capital gains report would save me a lot of time (NOT SO!)

    It appears what is happening, at least in my case, is that in the capital gains report, Quicken is using an AVERAGE COST BASIS number instead of the actual cost amount of my share purchases.  When I calculated that amount and multiplied that by the share amounts received from my dividend/reinvest transactions, then the cost basis numbers MATCH with what is in the capital gains report, and is TOTALLY INCORRECT!

    QUICKEN NEEDS TO FIX THIS WITH A PATCH ASAP!!!  THIS IS A LIABILITY, AS A USER COULD GET AUDITED BY THE IRS IF THEY TRIED TO USE THIS TO REPORT CAPLITAL AGAINS WITH INCORRECT DOLLAR AMOUNTS.

    It sounds like whoever programed this report used the average cost basis amount to cut down on calculation time, and is a case of really lazy programming.  It's a lot more complicated than that, as you have to calculate this for each transaction, factor in stock splits, etc.

    yes in my case it was this option being checked, though I don't recall ever having checked that option.  The amounts are reporting correctly now that I have adjusted that.  THANK YOU!

    As for the issue the user above reported, it could be that the securities were sold under different lots.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited March 2017
    Parallox said:

    Ok, I did some number crunching and think I figured out what the problem is and have reported my findings to quicken.  I have a similar issue, as I had some funds that I needed to report capital gains to the IRS, and figured the capital gains report would save me a lot of time (NOT SO!)

    It appears what is happening, at least in my case, is that in the capital gains report, Quicken is using an AVERAGE COST BASIS number instead of the actual cost amount of my share purchases.  When I calculated that amount and multiplied that by the share amounts received from my dividend/reinvest transactions, then the cost basis numbers MATCH with what is in the capital gains report, and is TOTALLY INCORRECT!

    QUICKEN NEEDS TO FIX THIS WITH A PATCH ASAP!!!  THIS IS A LIABILITY, AS A USER COULD GET AUDITED BY THE IRS IF THEY TRIED TO USE THIS TO REPORT CAPLITAL AGAINS WITH INCORRECT DOLLAR AMOUNTS.

    It sounds like whoever programed this report used the average cost basis amount to cut down on calculation time, and is a case of really lazy programming.  It's a lot more complicated than that, as you have to calculate this for each transaction, factor in stock splits, etc.

    Original message refers to Stocks.  If the poster didn't specify, to the brokerage, which lots to sell ... they probably used FIFO.  If the same method wasn't selected in Q, a discrepancy would arise.

    OR, if specific lots were communicated to the brokerage, but something else recorded in Q, there would arise a discrepancy also.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Ron
    Ron Member ✭✭
    edited March 2018
    I cashed in $2000 from a mutual fund during the year (2017) and the cap gains report shows a lesser amount in gross proceeds.  I would think the gross proceeds should show $2000.  The use avg cost box was unchecked.  Interesting that another mutual fund that I have shows the correct gross proceeds value that I actually withdrew. Any help appreciated as I am doing 2017 taxes and Quicken gross proceeds does not match with form 1099-B
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited November 2018
    Look carefully at the Sell transaction, see if the numbers match those on your statement, and make any corrections necessary. If the Sell looks correct, you might try deleting an re-entering it to see if that makes a difference in the tax reporting.

    You could also try File/File operations/Validate and repair in case there is something amiss in your data file.
    QWin Premier subscription
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