I have a Reverse Stock Split with shares purchased in two lots. How do I get the fractional shares

jrm

Hi.

Q2015 R 13 US, Windows 7.

I have 20+ years of Quicken behind me and have entered at least a handle for stock splits. I manually enter all my transactions, as I prefer the control, and over the years have had too many issues with downloads.

I have Frontier Corporation holdings acquired in two lots. With a brokerage statement in hand, I am entering in the 1:15 Reverse Stock Split. As is typically the case, fractional shares were sold off and I received cash in lieu. 

The brokerage statement shows the fractional shares as three transactions, 1 applied to the first lot and the other two applied to the second lot. (These, not surprisingly, are nominal monetary transactions.)

I entered the Reverse Split 


So far it looks good.

Prior to creating the transaction to sell of the fractional shares, I took a look at my holdings to make sure it appeared correct.


On the surface, this makes sense as the two lots pre-split were for 467 and 15 shares, respectively. The fractional share amount matches the total fractional shares shown on the brokerage gain/loss detail. However, the entire fractional share in Quicken is applied to the 2015 lot. On my brokerage statement, it applies a truly miniscule portion of the fractional share (.00414) to the 2010 lot.

My gut says that I am over-thinking this as I am literally taking about cents, as it relates to gain/loss. and therefore, I think that given a) this is such a small quantity and b) from a gain/loss perspective it will only apply to tax year 2017, should I just ignore it. 

However, I am curious, if there would be a workaround, or if someone has experienced anything similar.

Thanks for your thoughts.

q_lurker

You are probably overthinking this, but ...

On the sale of the 0.13333 shares, you can specify lots and therein identify that 0.00414 shares of the sold shares came from the 1 share lot with the balance from the 31.13333 share lot..  

Personally, I think I'd rather have it as two lots of 1 and 31 shares.  All a matter of how precisely you choose to match the brokerage data.  

jrm

yes. I decided last night I to ignore the difference, i.e. "I am overthinking." Thanks for answering, however, just a note that I know I can do the sale against the two lots as you indicate. Really, what I was wondering was if I could "override" the split transaction such that the lot that originally had 15 shares would have 1.00414 post-split.

Really, a mental exercise going forward as I would like the one lot to have a whole share as well.

Thanks again.

Tom Young

You could delete the stock split transaction, do a "Remove" action to delete the 482 shares entirely, and then do two "Add" actions to re-jigger to split giving you one lot of 1.00414 and another lot 31.12919 shares.

I certainly can't get my head around what the broker did here.  There can be transactions involving many lots, with each lot receiving fractional shares, and then all those fractional shares get added together resulting in some number of whole shares and a fraction.  The resulting fraction after the summing gets sold and you attribute, proportionally, basis from each lot pre-split to the fractional share. 

But the original lot of 15 shares contributed NOTHING to the fraction of a share you ended up with so I don't see how it can lose any basis in the sale of the fraction.

q_lurker

jrm said:

yes. I decided last night I to ignore the difference, i.e. "I am overthinking." Thanks for answering, however, just a note that I know I can do the sale against the two lots as you indicate. Really, what I was wondering was if I could "override" the split transaction such that the lot that originally had 15 shares would have 1.00414 post-split.

Really, a mental exercise going forward as I would like the one lot to have a whole share as well.

Thanks again.

I took your comment "it applies a truly miniscule portion of the fractional share (.00414) to the 2010 lot." to mean that the brokerage allocated the sale of the 0.13333 shares as 0.12918 against the 2015 lot (32.13333 shares to 31.00415) and as 0.00415 against the 2010 lot (1 share to 0.99585).  That is taking a proportional amount from each lot and would certainly be defensible.  You are choosing to allocate all the 0.13333 shares to the larger lot making your by-lot holdings 31 and 1 share.  

I see no justification to be increasing the 1-share lot to 1.00415 shares.