Fixing the cost basis of ETFs

MichaelCortese

About a year ago, I transferred brokerages (it was 4 ETFs).  I accepted the transactions that downloaded into Quicken. It was 4 remove shares and 4 add shares.  I didn't think about it much.  Of course, now my cost basis is off (which I realized but figured since it is an IRA, not that big of a deal).  Now I would like to fix it.  My question is if I replace those add/removes with transfers like I should have done originally, will it mess up anything else (like dividends or something)?

q_lurker

On the existing 4 Add Share transactions, edit each transaction and enter in a value for the Cost Basis and Acquisition date for the added shares.  If was multiple lots that were removed (even by one remove transaction) you would want multiple Add Shares for the  highest level of completeness.  Putting in the aggregate basis for the one Add Shares is a viable compromise.  

[Adding in the Acquisition date is also a 'completeness' option with respect to an IRA account.  You don't 'need' the information, but you might want to have it.  For a taxable account, you would be likely to need the info to get cap gains info right upon sale.  Even then, the detail of each long-term holding may not be needed; only enough to confirm it as long term.]

To better answer your question, if you do the change you proposed, you will not mess up other things like dividends or something.  Subsequent sales could be affected, but not materially in a retirement account.

MichaelCortese

They were multiple purchases as dividends were reinvested before the transfer.  But it sounds like I can change the add/remove to a transfer and it won't affect future transactions.  There were no future sales, just dividends.

MichaelCortese

Now I've got a mess.  I deleted the remove from the old account and the add to the new account.  Then I did "Enter Transactions" on the old account and did a transfer shares (all)  to the new account.  The old account still has the full value though.  

I do have backups....

q_lurker

MichaelCortese said:

They were multiple purchases as dividends were reinvested before the transfer.  But it sounds like I can change the add/remove to a transfer and it won't affect future transactions.  There were no future sales, just dividends.

No, you cannot change the Remove/Add pair to a Transfer.  There is no Transfer transaction.  You can edit the Add portion to accomplish the supply of aggregate cost basis information which is what I was suggesting as simple to execute option.  

The Shares Transferred between Accounts action is a macro-transaction that will generate the Remove Shares transaction (exactly like the current one, except with different memo filed info) and a series of Add Shares transactions representing each lot of the holding under the prior brokerage as it is added into the new account.  The Shares Transferred macro-transaction is generally preferable (IMO) because it carries the cost basis and acquisition dates of each lot to the new brokerage account.  Almost always, the Shares Added transaction that comes directly from the new brokerage download does not have that detail.  That is the detail you are looking to get back.  

So your options are: 

• Edit the four existing Add Shares transactions to get the same aggregate cost basis into your account data (a really simple process), or 
• Delete the four Remove Shares / Add Shares pairs and from the old account use the Shares Transferred function to get all that data on a per lot basis (also a pretty simple process in reality)

Of course, back up your file before heading off on that second path (or maybe on either path).  

MichaelCortese

MichaelCortese said:

They were multiple purchases as dividends were reinvested before the transfer.  But it sounds like I can change the add/remove to a transfer and it won't affect future transactions.  There were no future sales, just dividends.

Thanks.  I got it all fixed.  It was user error below.  I entered 4/27/18 as the date instead of 4/27/17.