How to enter DVMT and new DELL transaction into Quicken

Satish · December 2018

Just recently, DVMT holders who opted to get all cash, instead, got some cash and some recently issued DELL stock. How do I enter this transaction into quicken?

Thanks

Quicken Harold · December 2018

Hello Satish. Appreciate your question..

Which version of Quicken are you using: https://getsatisfaction.com/quickencommunity/topics/add-your-quicken-information-to-your-posts-plus-...

Please let us know so that we can best help you.

Respectfully,
~ Quicken Harold.

Satish · December 2018

I should have included this information in my question.

I've just upgraded to Quicken 2019 Deluxe on Windows 10.

Thanks

Tom Young · December 2018

This is considered a sale of your DVMT stock. However, the transaction is one of those classic "cash plus stock" deals that require some special handling and there's no "wizard" within Quicken that will allow to simply enter some numbers in some field and get the correct answer.

The number of DVMT shares tendered that requested "cash" exceeded the cash available to be distributed so allocations were required and, accordingly, shareholders requesting all cash did get a combination of cash and stock. Dell at some point, fairly soon, should report exactly how much cash and how much stock was issued for each share tendered, (since fractional shares were not issued but were instead sold via cash in lieu it's highly unlikely that the round number of shares deposited in the account gives the correct figure), so I'd wait a bit before attempting to crunch the numbers.

miklk · December 2018

You really need to wait till Dell (investor relation) issues there final guidance with the IRS form 8937. Usually within about a week.

You can get all the info now by looking through your broker transactions and Dell web site and filings.

There are many ways to do it and they probably will not give good guidance based on how they did the EMC/DVMT guidance.

In general the way I plan on doing it is:

DVMT Shares Owned X .6414 = DVMT Shares that will sell at $120 per Share
Sell Transaction as above (probably need a minor adjustment in amount received to get exact match to dollar amount received by changing the amount received to match broker number)

DVMT Remaining Shares X 1.8066 = Amount of Dell received at $46 per share (subject to adjustment)
You can do a Corp Acquisition (Stock DVMT for Stock DELL) for this using the 1.8066 number and $46 per Share

Next enter Sell for the fractional shares of Dell remaining which will come in as Cash in Lieu of fractional (The amount received will need to be edited later as almost never matches)

Things to Remember:

Make Backup BEFORE starting as easy to make mistakes
There are many ways to do this so one size may not fit all; Tax Basis and Cost can be complicated
IF you find you have the cost basis wrong later, it may be easiest to enter a Remove Shares for all DELL and a ADD Shares for Dell inserting the correct Date and Basis

reginaO · January 2019

I have 44 shares of DVMT. Usine .6414 does not give me the correct fractional shares.
Brokerage statement shows ,506

Tom Young · January 2019

The correct number is
0.6478

Tom Young · January 2019

This is a cash plus stock deal that requires some special accounting from a income tax standpoint.

For EACH LOT of your stock that you gave up you need to determine gain or loss based on the "proceeds" of the sale (cash per share + FMV of stock received) vs. your basis in that lot.
Losses are NOT recognized in your tax return, they are not "offset" against gains.
Gains ARE recognized but only up to the LESSER of cash received or the gain as calculated per 1 above.
For each lot your basis in the stock of the acquiring company - before addressing the Cash in Lieu issue - is: Basis in lot of acquired company tendered - cash received + gain recognized.
You then attribute, proportionally, basis from each lot of the acquired company to the fractional share and and RECOGNIZE gain or loss on the CIL transaction.*
Having done all this you report the 1099-B cash received (excluding CIL) as your proceeds and derive a basis figure that gets you to the gain (short term and long term) that you derived in step 3 above.

You do these calculations outside of Quicken and then make your entries into Quicken as described below.

If you only have one lot of DVMT stock then the process is
fairly simple, but if you have several lots of stock then my suggestion
is to fire up your Excel spreadsheet and do your calculations outside of
Quicken. The Open, High, Low and Close of DELL on the first day after
the merger (12/28/2018) were:

$46.00
$46.50
$44.77
$45.43

and you are free to derive whatever per share "fair market value" of DELL you
want to use (there's no "cookbook" formula). At some point DELL will
post a Form 8937 with their suggested per share number. You may want to
wait for the Form 8937 before doing your accounting in Quicken, though
that's not strictly necessary.

Calculate the per share cash received for each lot of DVMT as

(Cash received EXCLUDING the Cash in lieu) / (number of shares tendered).

(It should be something like $76.9665.....)

The per share DELL stock received number is .6478

If you need to resort to a spreadsheet for your calculations then I'd suggest listing for each lot of DVMT stock:

its date acquired, (it's best to list them in chronological order, oldest first)
its basis,
how much cash was received for the lot,
how many "new" shares were received for those shares tendered,
the total "proceeds" received for that lot which is (number of shares received x per share fair market value) + cash, and
the gain for each lot which is the lesser of cash receive or the gain based on "proceeds" minus basis.

If you have a loss for a particular lot you enter $0 in its "gain" column.

On the same line for each listed lot you can also calculate your basis
in "new" shares received which is:

old basis - cash received + gain
recognized for that lot, (obviously $0 for loss lots.)

Now
summarize your gains, if any, into short term and long term gains.
Using only the cash received for your short term holdings, derive a
basis to use against that cash to come to the short term gain you've
determined. Likewise, using only the cash received for your long term
holdings, derive a basis to use against that cash to come to the long
term gain you've determined.

If you've done all this then you're ready to make your entries into Quicken so:

Make one entry to Remove all old shares
Make one
entry to Add back your old short term shares using any date that makes
the new "lot" short term and using a per share cost that comes to the
derived basis determined above.
Make one
entry to Add back your old long term shares using any date that makes
the new "lot" long term and using a per share cost that comes to the
derived basis determined above.
Sell your short term and long term holdings for the cash you received for each "lot'.

At
this point your cash (before cash in lieu) is properly stated in Quicken
and your long term and short term gains are properly stated.

Now
do a series of Add actions to establish each lot of "new" shares using
an appropriate "acquired" date (same as date of lot tendered) and an
appropriate per share cost to come to the basis you calculated for each
lot.

Then
you sell whatever fractional shares you "should have" received for the
cash in lieu, recognizing a gain or loss as appropriate.

If
you have a lot of shares then it's a fair amount of work, though using
the power of Excel you can pretty much reduce the Excel "entry" effort
to listing out the date of acquisition, number of shares and per share
cost of each of your "old" shares, and letting Excel do all the calculations.

Several
years ago it was clear to me that brokers were submitting 1099-Bs for
these deals listing only the cash as "proceeds". It now appears that
brokers might be doing all the calculations for you right within the
body of the 1099-B itself, setting "proceeds" to the combination of
stock plus cash and even including the "derived" basis to use for the
sale.

*Check with your broker's cost detail by lot - if that's available to you - to see if they did it differently than recommended. Use the broker's method here to keep you in sync with the broker.

reginaO · January 2019

44 DVMT shares x .6478 = 28.5032 DELL

Tom Young · January 2019

Use 22.506/44 then; perhaps some rounding caused by multiple lots?

reginaO · January 2019

How do I enter the entire transaction in Quicken.
Is the 44 DVMT to 28.506 Dell a spin off

Tom Young · January 2019

No. See the post below for the accounting. If you want to give me the lot by lot information - date acquired, number of shares, cost for the lot - I can tell you how to enter in Quicken.

reginaO · January 2019

44 SH Dvmt purchased 1-28-2008 for $2112.00..
44 sh Dvmt sold for $3386.53 cost $781.76
.506 fr sh DVMT sold for $22.78 cost $22.99.
balance in account 28 sh DELL cost $1272.05
Thank you for your help

Tom Young · January 2019

I am coming up with slightly different numbers than the broker, who has actually given you pretty much all you need to determine the "Quicken" entries I've described below. Some of the difference probably amounts to some rounding or maybe the use of slightly different numbers by your broker, so you may want to ask them

Exactly what figure was used for the fraction of a share of Dell you received for each share tendered. The number my broker told me was .6478 while it appears your broker used something like 0.647855.
Exactly what "per share" FMV of Dell stock was used. It seems to be something like
$46.667
How they treated the fractional share in the overall calculation of gain or loss on the tender. It should be included as part of the "proceeds", but may it wasn't.

Using the numbers you gave me and attempting to work backwards to the "fine detail" I'd make entries along the lines of

Remove 44 shares DVMT
Add 44 shares DVMT at a cost of $17.767273 per share with a "Date acquired" of 1/28/2008
Sell your DVMT shares for $3,386.53

That gets that correct amount of cash in your Account and gives you the broker's gain of $2,604.77.

Then you sell your .506 share of Dell for $45.02 (.506 x $45.02 = $22.78).

Here's where things get a little wonky.

Your new basis in ALL the shares received in the tender is:

Old basis - cash + gain

$2,112.00 - $3,386.53 + $2,604.77 = $1,330.24.

Since you received 28.506 shares that means the per share cost, before the sale of the fraction, is

$1,330.24/28.506 = $46.665263

so the basis associated with the sale of the fraction should be $46.665263 x .506 = $23.61, so we seem to be "off" $.62 here and I come up with a slightly different loss.

And your final cost after the sale of the fraction should be

$1,330.24 - $23.61 = $1,306.63 which is considerably different than the broker's number. Maybe some fees are being assessed in all this? Or maybe your original number for the DVMT excludes some fees? Or something else?

At some point the Form 8937 should be available and maybe that will change something.

reginaO · January 2019

Do I add the 28.506 Dell shares as of 1-28-2008.

Tom Young · January 2019

Yes. I somehow left that off. You need that entry in order to sell your fractional share. Your per share cost is $46.665263

$46.665263 x 28.506 = $1,330.24

I still think you might ask the broker about how they came up with their numbers. Obviously you need to include the fractional share in your "proceeds" in order to have it to sell via the CIL, but somehow I think the broker is omitting it.

reginaO · January 2019

thank you

Tom Young · January 2019

And the "Date acquired" is your original date for the DVMT stock.

reginaO · January 2019

How do I handle this.
Quicken
I am trying to add my DELL shares. I use add security to find DELL click enter
then in the add shares window click enter it goes back to add security

reginaO · January 2019

symbol dell is not being added to security list. do I change security DVMT to DELL

Tom Young · January 2019

You should be able to add Dell simply as part of your Add transaction of 25.506 Dell shares. No need to "pre define" the security. The correct name for the old stock was not "Dell Technologies" it was "Dell Technologies Class V". Maybe that's what your running up against?

Tom Young · January 2019

You should be able to add Dell simply as part of your Add transaction of 25.506 Dell shares. No need to "pre define" the security. The correct name for the old stock was not "Dell Technologies" it was "Dell Technologies Class V". Maybe that's what your running up against?

miklk · January 2019

The IRS form 8937 Has finally been posted for reference

http://investors.delltechnologies.com/

reginaO · January 2019

thank you

How to enter DVMT and new DELL transaction into Quicken

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