Manually updating the cost basis of an investment

donaldwsmith

I am currently using Quicken 2010 Home & Business.  My investments have been bought and sold so many times it would be impossible to back and update previous transactions to correct the current cost basis.  Is there a way to manually correct the cost basis currently showing on the Portfolio Page?

q_lurker

J_Mike said:

After posting the above response, it occurred to me that this method will adjust the total cost basis of the holding and is correct if one holds a single lot. Holdings with multiple Lots will likely not carry the correct cost basis for each lot.

For multiple lots, one would need to enter Remove Shares and Add Shares for each lot. In the Add Shares transaction, one enters the Acquisition Date and Cost Basis for the specific lot. This could be tedious!!!

For multiple lots ... It can be made a little less tedious by entering (Enter Transactions) a Shares Transferred between Accounts transaction where the shares of the one security are transferred from the existing account to the same account.  That will generate all the applicable per lot Add Share transactions.  Your task would then be to edit each of those Add Shares to reflect the corrected (desired) cost basis for each lot; the Acquisition Dates would already be there correctly.  

J_Mike

One method I have used on occasion;

Enter a Return of Capital transaction for the security in question.
The value can be either positive or negative - as needed to make the adjustment.
In the ROC dialog Transfer Account field - select the account itself.
Example - if the name of your brokerage account is "ABC Brokerage", then for the Transfer Account, select [ABC Brokerage].

This ROC transaction will adjust the cost basis without affecting the cash balance of the account.

J_Mike

After posting the above response, it occurred to me that this method will adjust the total cost basis of the holding and is correct if one holds a single lot. Holdings with multiple Lots will likely not carry the correct cost basis for each lot.

For multiple lots, one would need to enter Remove Shares and Add Shares for each lot. In the Add Shares transaction, one enters the Acquisition Date and Cost Basis for the specific lot. This could be tedious!!!

q_lurker

J_Mike said:

After posting the above response, it occurred to me that this method will adjust the total cost basis of the holding and is correct if one holds a single lot. Holdings with multiple Lots will likely not carry the correct cost basis for each lot.

For multiple lots, one would need to enter Remove Shares and Add Shares for each lot. In the Add Shares transaction, one enters the Acquisition Date and Cost Basis for the specific lot. This could be tedious!!!

For multiple lots ... It can be made a little less tedious by entering (Enter Transactions) a Shares Transferred between Accounts transaction where the shares of the one security are transferred from the existing account to the same account.  That will generate all the applicable per lot Add Share transactions.  Your task would then be to edit each of those Add Shares to reflect the corrected (desired) cost basis for each lot; the Acquisition Dates would already be there correctly.  

Jim_Harman

If you don't care about the tax lots and just want the total cost basis to be correct, you could Remove all the shares and Add back the same number of shares with an appropriate long or short term acquisition date and basis.

Be aware however that this will prevent you from using Quicken to help decide which lots of a security to sell to optimize your taxes. If you subsequently sell part of your position, your cost basis in Quicken may no longer match what your FI is reporting.

J_Mike

@q_lurker wrote

For multiple lots ... It can be made a little less tedious by entering (Enter Transactions) a Shares Transferred between Accounts transaction where the shares of the one security are transferred from the existing account to the same account.

Neato!! - my lesson of the day.

Jim_Harman

If there are significant differences between the tax lots at your FI and those in Quicken, for example if you have multiple sales and the FI has been using FIFO but in Quicken you have been choosing lots to sell, the Shares Transferred trick may not help much.

q_lurker

Jim_Harman said:

If there are significant differences between the tax lots at your FI and those in Quicken, for example if you have multiple sales and the FI has been using FIFO but in Quicken you have been choosing lots to sell, the Shares Transferred trick may not help much.

Agreed.  My suggestion best fits if the lot acquisition dates and lot share quantities correspond.  Of the four relevant parameters - Security Name, Shares, Acquisition Date, and Cost Basis, the more in agreement, the better the use of that tool/trick.  (Security Name is sort of a given).