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Merger ELP and EP within partnership

rick5407

Trying to post ELP reorganization into EP. TD Ameritrade lists 24.881 shares of ELP removed and 31 shares of EP added (no change to cash balance). Supposed to be a non-cash transaction. This was two companies owned by the same partnership where they merged ELP into EP. One idea is to change the symbol to keep the old history so the gain/loss doesn't change. Did not seem correct when I chose to keep the history when prompted. Restored earlier backup. Looking for suggestions. Thanks!!!

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q_lurker

Who is EP and who was ELP? When?

Most likely you need to have EP acquire ELP (Quicken Corporate Acquisition) That should generate a Remove Shares of the ELP (24.881 ?) and an Add Shares (31 ?) for the EP holding. You can also enter such transactions manually, but if you have multiple lots, Quicken will do the behind-the-scenes, per lot calculations for you. The basis for the 24.881 ELP shares becomes the basis for the 31 EP shares (but read next paragraph).

Are you sure their was not or will not be a cash-in-lieu payment? It would not be uncommon for you to be due 31.123 shares (or some such fraction) via the acquisition ratio, but you actually get 31 shares + cash-in-lieu of the fractional share. In such a case, the rigorous approach is to record in Quicken that you received (added) 31.123 shares and then sold the 0.123 shares for the cash-in-lieu amount received.

See also for a similar (the same?) situation: https://getsatisfaction.com/quickencommunity/topics/energy-transfer-equity-lp-merger-with-energy-tra...

rick5407

Hi Q,

Thanks for the suggestion. The conversion was 1.28:1 ET for ELP. So, I used Corporate acquisitions transaction type, dated it 10/19/18, ETP acquired company, ET acquiring company and 1.28 as the conversion rate. I used the ET market price I found on price history of 17.06 for ET on 10/19/18 in the required field. Quicken "removed" ETP and ET purchase were listed as multiple additions of ET for every purchase I made in the past of ETP. The total stocks quantity shows as 31.84768 so I would have to add a fractional share to get me the 32 shares listed on the statement (31 + the 1 rounded share posted 11/02/18 in the account). All "additions" show as of 10/19/18 so as of that moment the cost basis is as of 10/19/18 and no gain / loss at that time. From a tax perspective the cost basis I should show is what I paid for ETP? The brokerage show the actual purchase cost of ETP on the ET line in the 11/30/18 statement and consequently an unrealized loss, whereas Quicken now show an unrealized gain. I need Quicken to have the same gain / loss as the brokerage. Still thinking...

rick5407

Hi Q,

Thanks for the suggestion. I did what you said and that seem to work except that there was another merger within the partnership in 2017. Sunoco was merged into ETP in 2017. The ticker stayed the same for me since all I had was ETP shares. At that point I "removed" the shares I had and "added" shares back per the conversation but I did not put anything in for the cost or original purchase date fields. I figure I can't use the "Corporate Acquisition" transaction on that merger since it is the same symbol / company. I am thinking I should remove the 2017 addition transaction and put in multiple additions for each previous acquisition with the appropriate cost, that or I could put the full cost for all acquisitions in the one acquisition line since it's all long term capital gains now anyway. I am going to try that unless you have another suggestion.

Again Thanks,

rick5407

Hi Q,

Thanks for the suggestion. The conversion was 1.28:1 ET for ELP. So, I used Corporate acquisitions transaction type, dated it 10/19/18, ETP acquired company, ET acquiring company and 1.28 as the conversion rate. I used the ET market price I found on price history of 17.06 for ET on 10/19/18 in the required field. Quicken "removed" ETP and ET purchase were listed as multiple additions of ET for every purchase I made in the past of ETP. The total stocks quantity shows as 31.84768 so I would have to add a fractional share to get me the 32 shares listed on the statement (31 + the 1 rounded share posted 11/02/18 in the account). All "additions" show as of 10/19/18 so as of that moment the cost basis is as of 10/19/18 and no gain / loss at that time. From a tax perspective the cost basis I should show is what I paid for ETP? The brokerage show the actual purchase cost of ETP on the ET line in the 11/30/18 statement and consequently an unrealized loss, whereas Quicken now show an unrealized gain. I need Quicken to have the same gain / loss as the brokerage. Still thinking...

I am commenting on my own comment. see the next item as I think I found the problem.

q_lurker

Hi Q,

Thanks for the suggestion. I did what you said and that seem to work except that there was another merger within the partnership in 2017. Sunoco was merged into ETP in 2017. The ticker stayed the same for me since all I had was ETP shares. At that point I "removed" the shares I had and "added" shares back per the conversation but I did not put anything in for the cost or original purchase date fields. I figure I can't use the "Corporate Acquisition" transaction on that merger since it is the same symbol / company. I am thinking I should remove the 2017 addition transaction and put in multiple additions for each previous acquisition with the appropriate cost, that or I could put the full cost for all acquisitions in the one acquisition line since it's all long term capital gains now anyway. I am going to try that unless you have another suggestion.

Again Thanks,

re Sunoco deal in 2017, see: https://getsatisfaction.com/quickencommunity/topics/corporate-merger-energy-transfer-partners-and-su...

I agree you need to identify the cost basis information in the 2017 transactions in order to get that information used in the current transactions. Whether as multiple transactions or one transaction is your call. If all the lots were similarly priced, one transaction could be fine. If you foresee sell all these shares at once, once transaction might be adequate. If you might want to sell the high-cost (low gain) shares first or last, at different times, using multiple lots gives you flexibility. With 32 shares, I'd think condensing to one lot would make sense. Be sure to leave yourself a reminder or memo comment.

The round-up to 32 shares is an oddity. No way Quicken is going to manage that for you using the 1.28 ratio. IMO, best option is adjust the share ratio (1.323=32/24.188 instead of 1.28) then to selectively edit any 'lot' Add Share transactions to get the 32 total shares. Again a Reminder/memo comment will help in the future.