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average cost versus specifically identified cost

I recommend that Quicken provide the ability to have the same security twice, once using average cost and the second using specific identiifcation.

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  • Bob_L
    Bob_L SuperUser ✭✭✭✭✭
    It would be helpful if you provide examples of how this would be used.
    Quicken Premier Subscription, Windows 10 Home
  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    Bob_L said:
    It would be helpful if you provide examples of how this would be used.
    Suppose you maintain holdings of the same mutual fund at distinct financial institutions.  
  • Having different names isn't a solution.  You have that if you own General Motors and Ford.  I have this dilemma with the same "managed" security at the same institution in a qualified (IRA tax-deferred [Q]) account and a non-qualified (taxable account [NQ]).  The institution likes to use average cost, which is okay for the IRA, but not optimal for the NQ account.  I tried using Q and NQ at the end of the security name (e.g., GM-Q and GM-NQ) but both with the same ticker symbol (to get current downloaded market quotes), and it seems Quicken has trouble in listing both of them in drop-down lists, etc.  I feel that IRS allows differenct cost methods for different accounts (see IRS Pub 550, page 44 and discussion of "Average Basis") where in their discussion they reference twice "account"  (last full paragraph of that Pub section) (a Pub of course is not the law or regulations, but it is an IRS Pub) apparenty using a different cost method for different accounts for the same security.

  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    et0369 said:
    Having different names isn't a solution.  You have that if you own General Motors and Ford.  I have this dilemma with the same "managed" security at the same institution in a qualified (IRA tax-deferred [Q]) account and a non-qualified (taxable account [NQ]).  The institution likes to use average cost, which is okay for the IRA, but not optimal for the NQ account.  I tried using Q and NQ at the end of the security name (e.g., GM-Q and GM-NQ) but both with the same ticker symbol (to get current downloaded market quotes), and it seems Quicken has trouble in listing both of them in drop-down lists, etc.  I feel that IRS allows differenct cost methods for different accounts (see IRS Pub 550, page 44 and discussion of "Average Basis") where in their discussion they reference twice "account"  (last full paragraph of that Pub section) (a Pub of course is not the law or regulations, but it is an IRS Pub) apparenty using a different cost method for different accounts for the same security.

    Having different names is the solution.  

    We may only set Quicken to use average cost for mutual fund securities.  If you have a institution that likes to use average cost for stocks and you want Quicken to track the shares that way, you would need to pretend the shares are of a mutual fund and manage the holdings and quotes appropriately.
  • Bob_L
    Bob_L SuperUser ✭✭✭✭✭
    You you can have two securities with the same symbol but it makes downloading sort of semi-automatic, ie you have to manually change the one that is not matched to the online security.  Create the new security but do not give it a symbol.  Do that after the security has been created and then edit it to have the duplicate symbol. 

    On the other hand, why not just have one security and set it to specific lots like you want for the NQ?  That is cost tracking in the IRA isn’t really necessary.
    Quicken Premier Subscription, Windows 10 Home
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    "That is cost tracking in the IRA isn’t really necessary. "  It is if you want to track investment performance.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • I go back to my initial recommendation:  "I recommend that Quicken provide the ability to have the same security twice, once using average cost and the second using specific identiifcation."  The suggestions provided are okay, but wouldn't it be a lot simpler to allow the same security in different accounts to use a differenct cost method.
  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    et0369 said:
    I go back to my initial recommendation:  "I recommend that Quicken provide the ability to have the same security twice, once using average cost and the second using specific identiifcation."  The suggestions provided are okay, but wouldn't it be a lot simpler to allow the same security in different accounts to use a differenct cost method.
    I don't think it would be simpler to allow the same security in different accounts to use a differenct cost method.   How would a user specify which securities in an account should use average cost and which should not?  How would securities transferred between accounts where their cost basis is managed differently be handled?  

    In my opinion, having the cost basis associated with the security is a lot simpler.
  • You ask:  "How would a user specify which securities in an account should use average cost and which should not?"  I respond that when I select the "investment tab" and the "portfolio" view is shown, Quicken nicely shows in the "shares column" "ave cost."  Quicken should show such "ave cost" designation through out Quicken and distinguish a security with an "ave cost" separately from the same security not using "ave cost."  Quicken should not allow a single security in the same account with two different cost methods.  As I have recommended, one account should be able to have a security with one cost method (that appears to be IRS required and supported), but another account can have the same security with a different cost method.  A third account could choose whatever method that's available or the same method another account has used.

  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    et0369 said:
    You ask:  "How would a user specify which securities in an account should use average cost and which should not?"  I respond that when I select the "investment tab" and the "portfolio" view is shown, Quicken nicely shows in the "shares column" "ave cost."  Quicken should show such "ave cost" designation through out Quicken and distinguish a security with an "ave cost" separately from the same security not using "ave cost."  Quicken should not allow a single security in the same account with two different cost methods.  As I have recommended, one account should be able to have a security with one cost method (that appears to be IRS required and supported), but another account can have the same security with a different cost method.  A third account could choose whatever method that's available or the same method another account has used.

    You have not adequately answer the questions I asked.  From the responses you provided, it is appears you may not really understand the requirements for tracking cost basis.

    If you think the portfolio view is adequate to provide the average cost functionality you are looking for, I suggest you consider using Holdings view available to each investment account: open the investment account and select Holdings.

  • et0369
    et0369 Member
    edited April 2019
    You "You have not adequately answer the questions I asked.   From the responses you provided, it is appears you may not really understand the requirements for tracking cost basis."

    As to not understandfing the requirements of tracking cost basis, I, as a retired CPA and user of Quicken for over 30 years, think I do very well understand and am only make a recommendation for a Quicken program change.

    I think I have answered all of your questions - see below.  If I have missed any, let me know.
    ___________________________________________________________________________________
    You "We already have the ability but we do need to use a different name for the security to distinguish them.

    Having different names isn't a solution.  You have that if you own General Motors and Ford.
    ___________________________________________________________________________________
    ..."you would need to pretend the shares are of a mutual fund and manage the holdings and quotes appropriately. "

    When I try to set up the a security with the same name, Quicken says I already have that name.
    ___________________________________________________________________________________
    You "Suppose you maintain holdings of the same mutual fund at distinct financial institutions."

    You "I don't think it would be simpler to allow the same security in different accounts to use a differenct cost method.  (AN OPINION, NOT A QUESTION) How would a user specify which securities in an account should use average cost and which should not?How would securities transferred between accounts where their cost basis is managed differently be handled?"

    My response "Quicken should show such "ave cost" designation through out Quicken and distinguish a security with an "ave cost" separately from the same security not using "ave cost.""  This is available in portfolio view.
    ___________________________________________________________________________________
    You "If you think the portfolio view is adequate to provide the average cost functionality you are looking for, I suggest you consider using Holdings view available to each investment account: open the investment account and select Holdings."

    My response "Quicken should show such "ave cost" designation through out Quicken and distinguish a security with an "ave cost" separately from the same security not using "ave cost."  Quicken should not allow a single security in the same account with two different cost methods."

    This is why I specifically like the portfolio view because of its showing of the use of "ave cost" and only recommend that that feature be used through out Quicken.
    ___________________________________________________________________________________
    The bottom line in my opinion is that Quicken doesn't have the current ability to use two different cost methods for the same security.

    Hence my recommendation:
    "...that Quicken provide the ability to have the same security twice, once using average cost and the second using specific identiifcation."

  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    edited April 2019
    et0369 said:
    You "You have not adequately answer the questions I asked.   From the responses you provided, it is appears you may not really understand the requirements for tracking cost basis."

    As to not understandfing the requirements of tracking cost basis, I, as a retired CPA and user of Quicken for over 30 years, think I do very well understand and am only make a recommendation for a Quicken program change.

    I think I have answered all of your questions - see below.  If I have missed any, let me know.
    ___________________________________________________________________________________
    You "We already have the ability but we do need to use a different name for the security to distinguish them.

    Having different names isn't a solution.  You have that if you own General Motors and Ford.
    ___________________________________________________________________________________
    ..."you would need to pretend the shares are of a mutual fund and manage the holdings and quotes appropriately. "

    When I try to set up the a security with the same name, Quicken says I already have that name.
    ___________________________________________________________________________________
    You "Suppose you maintain holdings of the same mutual fund at distinct financial institutions."

    You "I don't think it would be simpler to allow the same security in different accounts to use a differenct cost method.  (AN OPINION, NOT A QUESTION) How would a user specify which securities in an account should use average cost and which should not?How would securities transferred between accounts where their cost basis is managed differently be handled?"

    My response "Quicken should show such "ave cost" designation through out Quicken and distinguish a security with an "ave cost" separately from the same security not using "ave cost.""  This is available in portfolio view.
    ___________________________________________________________________________________
    You "If you think the portfolio view is adequate to provide the average cost functionality you are looking for, I suggest you consider using Holdings view available to each investment account: open the investment account and select Holdings."

    My response "Quicken should show such "ave cost" designation through out Quicken and distinguish a security with an "ave cost" separately from the same security not using "ave cost."  Quicken should not allow a single security in the same account with two different cost methods."

    This is why I specifically like the portfolio view because of its showing of the use of "ave cost" and only recommend that that feature be used through out Quicken.
    ___________________________________________________________________________________
    The bottom line in my opinion is that Quicken doesn't have the current ability to use two different cost methods for the same security.

    Hence my recommendation:
    "...that Quicken provide the ability to have the same security twice, once using average cost and the second using specific identiifcation."

    You appear to be ranting...

    I only asked two questions:

    Sherlock said:
    et0369 said:
    I go back to my initial recommendation:  "I recommend that Quicken provide the ability to have the same security twice, once using average cost and the second using specific identiifcation."  The suggestions provided are okay, but wouldn't it be a lot simpler to allow the same security in different accounts to use a differenct cost method.
    I don't think it would be simpler to allow the same security in different accounts to use a differenct cost method.   How would a user specify which securities in an account should use average cost and which should not?  How would securities transferred between accounts where their cost basis is managed differently be handled?  

    In my opinion, having the cost basis associated with the security is a lot simpler.

    Your response was:

    et0369 said:
    You ask:  "How would a user specify which securities in an account should use average cost and which should not?"  I respond that when I select the "investment tab" and the "portfolio" view is shown, Quicken nicely shows in the "shares column" "ave cost."  Quicken should show such "ave cost" designation through out Quicken and distinguish a security with an "ave cost" separately from the same security not using "ave cost."  Quicken should not allow a single security in the same account with two different cost methods.  As I have recommended, one account should be able to have a security with one cost method (that appears to be IRS required and supported), but another account can have the same security with a different cost method.  A third account could choose whatever method that's available or the same method another account has used.

    You have not answered the questions adequately so others may understand how your recommendation could possibly work.
  • You "You appear to be ranting..."

    Let's keep this on a little bit of a higher plane, more professional, not get personal.

    The recommendation currently DOES NOT WORK!!!!!!! That's why I'm making a recommendation to Quicken to help and request a program modification.  Hopofully, other users have have had the same experience and wish for such a change.  It's usually very difficult to get "big companies," like Intuit, or whomever the current owner, is to make changes just from one person.

    From my end, this concludes our intellectual discussion of the issue.
  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    et0369 said:
    You "You appear to be ranting..."

    Let's keep this on a little bit of a higher plane, more professional, not get personal.

    The recommendation currently DOES NOT WORK!!!!!!! That's why I'm making a recommendation to Quicken to help and request a program modification.  Hopofully, other users have have had the same experience and wish for such a change.  It's usually very difficult to get "big companies," like Intuit, or whomever the current owner, is to make changes just from one person.

    From my end, this concludes our intellectual discussion of the issue.
    Quicken already provides the functionality that allows us to set a mutual fund security to use average cost.

    Quicken already allows us to create two instances of a security using distinct names.

    Quicken does not directly support using average cost basis for other types of securities as may be desirable for DRP (aka DRIP or Distributed Reinvestment Plan) purchased securities.
This discussion has been closed.