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Lot basis info gone after Mutual Fund Conversion - what is the proper way?

Matt

Hey folks,

Like many others I recently had to deal with Fidelity's consolidation of its index fund share classes. I have nearly the same experience as folks in this thread (https://getsatisfaction.com/quickencommunity/topics/fidelity-changed-merged-a-s-p-500-how-to-fix-in-...) and would have replied in there but comments were closed. I did the Mutual Fund Conversion on each holding and it did a Remove Shares and then did Add Shares for each lot I previously owned for each fund. I'm using Quicken Home & Business 2016 (Windows) running on Windows 10.

I have two issues and I'm not hopeful either will be able to be resolved properly.

1) The cost basis information for each individual lot is no longer present. While I recognize this isn't technically important in an IRA I still like to have the information for completeness sake. And I own the same fund in a taxable investment account so it would be nice to have the returns of each lot in case I need to do any tax loss harvesting. This is what it looks like in my taxable account:

Image httpsd2r1vs3d9006apcloudfrontnets3_images1767109RackMultipart20181213-14290-1ro7lh-conversion_inlineJPG1544739341

2) Likely related to the first one - the total return is incorrect for several of the funds. The total share count and market value is correct but it looks like the total return is incorrect by the amount of the dividends/cap gains distributions. I'm not certain of that but the numbers look roughly the same - in other words, the difference between total return in Quicken and total return on Fidelity's website appears to be roughly the amount of dividends/cap gains distributions I've received. Total share counts and values match Fidelity's website so I'm guessing it's not considering the dividends as part of my return somehow.

I've read through numerous threads on this topic and no one seems to have a fix. Wondering if this is just expected behavior in Quicken and I should suck it up and deal with the data not being accurate or if I'm missing something.

Thanks!

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Comments

Sherlock

The lack of the cost basis for the lots indicates the transactions as entered are not correct. The easiest way to address the issue may be to edit the transactions manually. Alternately, you could delete the Removed and Added transactions introduced (or restore a data file backup) and try again. As the Mutual Fund Conversion wizard is known to have issues, my preferences has been to use the Corporate Acquisition wizard instead. The functional difference is the Corporate Acquisition applies across all accounts where as Mutual Fund Conversion is limited to the current account.

If you haven't already, you may want to review: https://getsatisfaction.com/quickencommunity/topics/faq-convert-share-class-for-mutual-fund

Jim_Harman

Also remember that if you want to see the performance over a time period that includes the conversion date, you need to include both the old and new securities in the report.

Matt

The lack of the cost basis for the lots indicates the transactions as entered are not correct. The easiest way to address the issue may be to edit the transactions manually. Alternately, you could delete the Removed and Added transactions introduced (or restore a data file backup) and try again. As the Mutual Fund Conversion wizard is known to have issues, my preferences has been to use the Corporate Acquisition wizard instead. The functional difference is the Corporate Acquisition applies across all accounts where as Mutual Fund Conversion is limited to the current account.

If you haven't already, you may want to review: https://getsatisfaction.com/quickencommunity/topics/faq-convert-share-class-for-mutual-fund

Thanks for the reply.

If I were to edit the transactions manually, what would I actually change? If I look at all of the Added Shares transactions I see it has all of the right information (see below). There is one of these for each share purchase or dividend received. I'm not sure what exactly to change?

I can't easily go back to an old backup at this point. While I do have them the conversion took place on November 2nd and I'm concerned doing that would cause me to miss some transactions in other accounts due to the time passed. There have also been quite a few transactions where it would be a huge amount of work to re-do so I'm looking to avoid doing that if possible.

Thanks!

Tom Young

Also remember that if you want to see the performance over a time period that includes the conversion date, you need to include both the old and new securities in the report.

Well clearly the cost shown here is wrong. Given the shares and prices in the window the total cost should be $3,442.73

Jim_Harman

@Matt,

In the screenshot you posted, is this showing the old security or the new one?

[Corrected]
When shares are removed, the corresponding tax lots are also removed. In my data file with QWin 2019, I have a conversion that was entered in an earlier version of Quicken. If I set the date in the Account Overview or an Investing > Portfolio view prior to the removal date the total value of the holding is there but the individual tax lots are no longer visible.

In a test file where I entered a conversion using QWin 2019, when I set the date prior to the conversion I can still see the tax lots in the old security.

In the case of a conversion, the removed lots are replaced by lots of the new holding. These become visible if you set the date after the conversion date and they should show the original cost basis and purchase dates of each lot, as if you had held the new shares all along.

Sherlock

The lack of the cost basis for the lots indicates the transactions as entered are not correct. The easiest way to address the issue may be to edit the transactions manually. Alternately, you could delete the Removed and Added transactions introduced (or restore a data file backup) and try again. As the Mutual Fund Conversion wizard is known to have issues, my preferences has been to use the Corporate Acquisition wizard instead. The functional difference is the Corporate Acquisition applies across all accounts where as Mutual Fund Conversion is limited to the current account.

If you haven't already, you may want to review: https://getsatisfaction.com/quickencommunity/topics/faq-convert-share-class-for-mutual-fund

There should be a single Removed transaction for the holdings of original security in an account and an Added transaction for each lot of the original security for the new security. The Total cost and Date acquired on the Added transactions should be the same as the original lot. The Number of shares should be calculated by multiplying the number of shares in the original lot by the conversion ratio and Quicken should calculate the Price paid.

If you haven't already, you may want to verify that you haven't pulled in any placeholder transactions: https://getsatisfaction.com/quickencommunity/topics/quicken-faq-managing-placeholder-entries-in-quic...

Matt

The lack of the cost basis for the lots indicates the transactions as entered are not correct. The easiest way to address the issue may be to edit the transactions manually. Alternately, you could delete the Removed and Added transactions introduced (or restore a data file backup) and try again. As the Mutual Fund Conversion wizard is known to have issues, my preferences has been to use the Corporate Acquisition wizard instead. The functional difference is the Corporate Acquisition applies across all accounts where as Mutual Fund Conversion is limited to the current account.

If you haven't already, you may want to review: https://getsatisfaction.com/quickencommunity/topics/faq-convert-share-class-for-mutual-fund

You are correct - I have the single Removed and then Added transactions for each. My issue is that I don't have cost basis info for each lot. And that in some of my accounts the total return is incorrect compared to what I see on the Fidelity website (whereas before the conversion it matched perfectly).

I'm open to suggestions on how to fix this if it's even possible.

Thanks for the replies.

Jim_Harman

Also remember that if you want to see the performance over a time period that includes the conversion date, you need to include both the old and new securities in the report.

How do you get that? Just the first lot is 69.198 shares * $144.51 or about $10,000. A rough calculation rounding to the nearest share and dollar shows the cost basis is correct.

The problem is that the details are not showing.

Sherlock

The lack of the cost basis for the lots indicates the transactions as entered are not correct. The easiest way to address the issue may be to edit the transactions manually. Alternately, you could delete the Removed and Added transactions introduced (or restore a data file backup) and try again. As the Mutual Fund Conversion wizard is known to have issues, my preferences has been to use the Corporate Acquisition wizard instead. The functional difference is the Corporate Acquisition applies across all accounts where as Mutual Fund Conversion is limited to the current account.

If you haven't already, you may want to review: https://getsatisfaction.com/quickencommunity/topics/faq-convert-share-class-for-mutual-fund

Open the investment account, select Holdings, set the As of date just prior to the date of the conversion transactions, click on the small plus sign icon to the left of the original security to view the lots. Are you able to view the original cost basis for each lot?

Matt

Also remember that if you want to see the performance over a time period that includes the conversion date, you need to include both the old and new securities in the report.

Correct Jim - the values themselves are correct (in terms of shares owned and market value). The issue is that the details are not showing and I don't know how to get them to appear. I suspect that there is no way to do it and this is just a flaw in the Mutual Fund Conversion transaction type.

q_lurker

Also remember that if you want to see the performance over a time period that includes the conversion date, you need to include both the old and new securities in the report.

@Tom Young: Huh? Did the screenshot change? Are you referring to the Add Shares screenshot? 40.657 shares * $73.788/sh = $3000.

Jim_Harman

Also remember that if you want to see the performance over a time period that includes the conversion date, you need to include both the old and new securities in the report.

Or are you talking about the Shares Added window? That looks correct also: 40.66 shares added @ 73.89 is just about $3,000.

Matt

The lack of the cost basis for the lots indicates the transactions as entered are not correct. The easiest way to address the issue may be to edit the transactions manually. Alternately, you could delete the Removed and Added transactions introduced (or restore a data file backup) and try again. As the Mutual Fund Conversion wizard is known to have issues, my preferences has been to use the Corporate Acquisition wizard instead. The functional difference is the Corporate Acquisition applies across all accounts where as Mutual Fund Conversion is limited to the current account.

If you haven't already, you may want to review: https://getsatisfaction.com/quickencommunity/topics/faq-convert-share-class-for-mutual-fund

Her Sherlock,

That's funny - I've been using Quicken for years and never used the "As of" date to change the view.

If I do that then I do see the individual lots as of that day (see below) so it does have the historical information somewhere. This doesn't help me for the individual tax lots since the market values have changed since then but at least the data is there.

My question is this: is there a way to get the view to look like the screenshot below after the mutual fund conversion transaction?

Thanks to you and everyone else who is responding here!

Sherlock

The lack of the cost basis for the lots indicates the transactions as entered are not correct. The easiest way to address the issue may be to edit the transactions manually. Alternately, you could delete the Removed and Added transactions introduced (or restore a data file backup) and try again. As the Mutual Fund Conversion wizard is known to have issues, my preferences has been to use the Corporate Acquisition wizard instead. The functional difference is the Corporate Acquisition applies across all accounts where as Mutual Fund Conversion is limited to the current account.

If you haven't already, you may want to review: https://getsatisfaction.com/quickencommunity/topics/faq-convert-share-class-for-mutual-fund

Of course, it helps you. Now that you have access to the cost basis information, you should be able to replace the "bad" Added transactions with "good" Added transactions as described earlier.

You may want to check the new Security and verify you have not selected Use Average Cost.

q_lurker

@Matt: I note on your OP screenshot, the Fidelity Total Market Index fund is set to use Average Cost. I suspect that is the source of your issue. You say the same fund in the taxable account is OK. Is it truly in Quicken the same security - or a twin security sharing the same ticker (doubtful)?

When a MF Conversion is applied in Quicken, it only applies to the account within which you are entering that macro-transaction. Did you enter the conversion separately for the two different Quicken accounts?

It may be that a fund set for Average Cost might be treated differently in a retirement account than a taxable account. I am not aware of anyone who has tested for that, or commented about that.

It is plausible to me that with a security set to use average cost, tax lots could be lost through this process. Again, I have not tested that process for that case. But since any sale would have altered each lot differently, I can imagine that Quicken would have to effectively treat the lots as one after that sale.

On the return question, I think you will see a divergence after the conversion. Essentially, after all the Add Shares transactions are correctly created, Quicken has no way to know which of those lots were originally true purchases and which were reinvested dividends.

HTH

Jim_Harman

@Matt,

Assuming that your screenshot at the top is for the new shares, one thing you might check is to confirm that the price history is correct for the new shares on the dates in question. I can imagine that if it is zero for example, the display might not compute correctly.

While you are at it, make sure the price is also correct in the price history for the shares removed on the conversion date. That will affect the performance calculations.

Matt

The lack of the cost basis for the lots indicates the transactions as entered are not correct. The easiest way to address the issue may be to edit the transactions manually. Alternately, you could delete the Removed and Added transactions introduced (or restore a data file backup) and try again. As the Mutual Fund Conversion wizard is known to have issues, my preferences has been to use the Corporate Acquisition wizard instead. The functional difference is the Corporate Acquisition applies across all accounts where as Mutual Fund Conversion is limited to the current account.

If you haven't already, you may want to review: https://getsatisfaction.com/quickencommunity/topics/faq-convert-share-class-for-mutual-fund

In order to replace them with "good" added transactions, you're saying I delete the ones that were made as a result of the Mutual Fund Conversion transaction and re-create them manually?

My apologies for being dense here but I'm honestly unclear how that will make any difference. I'm more than willing to try it of course I just don't see how doing that would make the individual lots show the gain/loss again.

If I'm wrong please tell me and I'm happy to try recreating them manually.

Thanks!

Sherlock

The lack of the cost basis for the lots indicates the transactions as entered are not correct. The easiest way to address the issue may be to edit the transactions manually. Alternately, you could delete the Removed and Added transactions introduced (or restore a data file backup) and try again. As the Mutual Fund Conversion wizard is known to have issues, my preferences has been to use the Corporate Acquisition wizard instead. The functional difference is the Corporate Acquisition applies across all accounts where as Mutual Fund Conversion is limited to the current account.

If you haven't already, you may want to review: https://getsatisfaction.com/quickencommunity/topics/faq-convert-share-class-for-mutual-fund

First, check that you do not have Use Average Cost selected on the new security.

Matt

@Matt: I note on your OP screenshot, the Fidelity Total Market Index fund is set to use Average Cost. I suspect that is the source of your issue. You say the same fund in the taxable account is OK. Is it truly in Quicken the same security - or a twin security sharing the same ticker (doubtful)?

When a MF Conversion is applied in Quicken, it only applies to the account within which you are entering that macro-transaction. Did you enter the conversion separately for the two different Quicken accounts?

It may be that a fund set for Average Cost might be treated differently in a retirement account than a taxable account. I am not aware of anyone who has tested for that, or commented about that.

It is plausible to me that with a security set to use average cost, tax lots could be lost through this process. Again, I have not tested that process for that case. But since any sale would have altered each lot differently, I can imagine that Quicken would have to effectively treat the lots as one after that sale.

On the return question, I think you will see a divergence after the conversion. Essentially, after all the Add Shares transactions are correctly created, Quicken has no way to know which of those lots were originally true purchases and which were reinvested dividends.

HTH

Good catch on the average cost for the fund. i didn't actually do that myself - it happened automatically when I did the Mutual Fund Conversion transaction. If you look at my screenshot above which shows the fund one day before the conversion took place it doesn't have average cost. I don't know of a way to change it not to use average cost.

I have this fund in a total of 3 accounts (two IRAs and a taxable investment account) so I had to do the mutual fund conversion 3 times. It shows this way for all of them unfortunately.

You're absolutely right that the issue on total return is the dividends. I wonder if there's a way to fix that.

Jim_Harman

The lack of the cost basis for the lots indicates the transactions as entered are not correct. The easiest way to address the issue may be to edit the transactions manually. Alternately, you could delete the Removed and Added transactions introduced (or restore a data file backup) and try again. As the Mutual Fund Conversion wizard is known to have issues, my preferences has been to use the Corporate Acquisition wizard instead. The functional difference is the Corporate Acquisition applies across all accounts where as Mutual Fund Conversion is limited to the current account.

If you haven't already, you may want to review: https://getsatisfaction.com/quickencommunity/topics/faq-convert-share-class-for-mutual-fund

Also please see the recent comments farther down in this thread.

Matt

Hey everyone,

I am not sure who got it first (Sherlock, Jim, [edit] or q.lurker) but the issue was the Average Cost. I didn't notice it but I'm very glad you all did! I unchecked "use average cost" in the properties of that fund and it fixed the problem. I actually have this fund in four different accounts and this fixed it for all of them! It didn't fix the total return being off which is unfortunate but at least I understand why (since it doesn't know what was a purchase vs. what was a dividend reinvestment).

Thank you all for your time and fast replies!! Hope everyone has a great weekend.

Sherlock

Hey everyone,

I am not sure who got it first (Sherlock, Jim, [edit] or q.lurker) but the issue was the Average Cost. I didn't notice it but I'm very glad you all did! I unchecked "use average cost" in the properties of that fund and it fixed the problem. I actually have this fund in four different accounts and this fixed it for all of them! It didn't fix the total return being off which is unfortunate but at least I understand why (since it doesn't know what was a purchase vs. what was a dividend reinvestment).

Thank you all for your time and fast replies!! Hope everyone has a great weekend.

I think q.lurker spotted it first.

Matt

Hey everyone,

I am not sure who got it first (Sherlock, Jim, [edit] or q.lurker) but the issue was the Average Cost. I didn't notice it but I'm very glad you all did! I unchecked "use average cost" in the properties of that fund and it fixed the problem. I actually have this fund in four different accounts and this fixed it for all of them! It didn't fix the total return being off which is unfortunate but at least I understand why (since it doesn't know what was a purchase vs. what was a dividend reinvestment).

Thank you all for your time and fast replies!! Hope everyone has a great weekend.

You all helped so thank you all - much appreciated!

Jim_Harman

@Matt: I note on your OP screenshot, the Fidelity Total Market Index fund is set to use Average Cost. I suspect that is the source of your issue. You say the same fund in the taxable account is OK. Is it truly in Quicken the same security - or a twin security sharing the same ticker (doubtful)?

When a MF Conversion is applied in Quicken, it only applies to the account within which you are entering that macro-transaction. Did you enter the conversion separately for the two different Quicken accounts?

It may be that a fund set for Average Cost might be treated differently in a retirement account than a taxable account. I am not aware of anyone who has tested for that, or commented about that.

It is plausible to me that with a security set to use average cost, tax lots could be lost through this process. Again, I have not tested that process for that case. But since any sale would have altered each lot differently, I can imagine that Quicken would have to effectively treat the lots as one after that sale.

On the return question, I think you will see a divergence after the conversion. Essentially, after all the Add Shares transactions are correctly created, Quicken has no way to know which of those lots were originally true purchases and which were reinvested dividends.

HTH

Glad you found the average cost problem. If you haven't sold any shares, you should be able to de-select that in the Security Details. Back up first, just in case...

Re: dividends, IMO the proper way to track performance is to include them, whether or not you reinvest them. That's what Quicken's Investment Performance report and the "Av. Annual Return" columns in the Investing > Portfolio views do. Reinvested dividends do not show up as line items in the report, but they are included because they increase your ending balance.

Mutual fund performance reports and sites like Morningstar generally assume all distributions have been reinvested.

Annoyingly, charts of ETFs often just look at the share price changes.

Jim_Harman

For everyone's information, it looks like the tax lot details are always blank if you choose "Use average cost".

That makes sense, because Quicken is treating them as one big lot for tax purposes.

Tom Young

Also remember that if you want to see the performance over a time period that includes the conversion date, you need to include both the old and new securities in the report.

My mistake. Obviously fat-fingered something on the calculator.