cost basis calculated incorrectly

Robert Berman

I am using Q2019 Windows R18.15 Build 27.1.18.15 and have a question about cost basis. 

In a taxable investment brokerage account:

I purchased 595 shares @143.693899
Quicken correctly reports cost basis as $85,506.82  (viewed using Holdings)

After a sale of 130 shares @ 165.562615 (net sale proceeds of $21,513.72)
Quicken reports cost basis as $63,993.10

This is wrong. My broker has cost basis as $66,826.61 which is correct.

The brokerage calculates cost basis as $85,506.82 - (130 shares sold * $143.693899 original price)
Quicken seems to calculate it as $85,506.82 - $21,513.72 (sale proceeds using higher price!)

My CPA found this and told me the brokerage is correct, Quicken is wrong.

I called Quicken support and they just disconnected me.

Is there any way to get Quicken to calculate correct cost basis?

Tom Young

"I purchased 595 shares (AT) 143.693899  Quicken correctly reports cost basis as $85,506.82"

Try as I might, I get $85,497.87 for that math.  The use of 6 digits to the right of the decimal point is unusual.  Are you really using some average of the costs of multiple lots here?  You can't use an average cost for stocks, you have to deal with individual lots.

I entered 595 shares bought at $143.693899. then sold 130 of those shares and ended up with a remaining cost of $66,817.66 which seems correct, mathematically.

If in reality you started with one lot of 595 shares at $143.693899 per share and then sold 130 of those shares - at any selling price - you should have 465 at that same per share cost.

It sounds like something has gone south in your Quicken data base.  First thing to try is File > File Operations > Copy..   Using that Copy of your file, do a validation and repair of the file including rebuilding of the investment lots.

Robert Berman

The buy transaction shows:

Number of shares: 595
Price paid: $143.693899
Commission of $8.95 I left out, sorry.
Total cost: $85,506.82

So now the cost basis is $85,506.82  (this is what it cost me). This is what Quicken and the broker show at this point.

Then a sale:

Number of shares: 130
Price paid: $165.562615
Commission of $9.42 on this one
Total proceeds: $21,513.72


The cost BASIS for the entire position should be $66,826.61, not $63,993.10
I sold off 130 shares so the basis should be reduced by that many shares times the original price, not the latest price.

The broker has the correct basis, Quicken has the wrong one.

The market value is the total # of shares times the price, but that is not what cost basis is.

I've done the validation - all is fine with the file - no warnings/errors detected.

Tom Young

The correct cost basis is $66,824.66 - you can't use the original per share cost, you have to adjust it for the purchase commission.  All I can say is that in my test file Quicken is handling things properly

so despite "validate and repair" not finding anything to fix, it looks like your file is the problem.

If there's only that one purchase of the stock involved, maybe delete it and re-enter it? 

Robert Berman

Not sure what was going on. I deleted all the transactions in Quicken for this security, and manually re-entered them all. Now it ties out perfectly!

Sherlock

Robert Berman said:

The buy transaction shows:

Number of shares: 595
Price paid: $143.693899
Commission of $8.95 I left out, sorry.
Total cost: $85,506.82

So now the cost basis is $85,506.82  (this is what it cost me). This is what Quicken and the broker show at this point.

Then a sale:

Number of shares: 130
Price paid: $165.562615
Commission of $9.42 on this one
Total proceeds: $21,513.72


The cost BASIS for the entire position should be $66,826.61, not $63,993.10
I sold off 130 shares so the basis should be reduced by that many shares times the original price, not the latest price.

The broker has the correct basis, Quicken has the wrong one.

The market value is the total # of shares times the price, but that is not what cost basis is.

I've done the validation - all is fine with the file - no warnings/errors detected.

I just entered the transactions you provided and Quicken presents the cost basis as $66,826.66.  The math appears to be $85,506.82 - (($85,506.82 / 595) x (595 - 130)).

Robert Berman

I'm fine now since I deleted the transactions and reentered them manually.