How to handle the complete replacement of a fund (by the brokerage) with another within an IRA?

GEHKSH

Several of our IRA mutual funds were replaced by the brokerage with new funds with similar objectives. The One Step Update could not handle that change, and neither could I. Could this be handled by recording (in Quicken) the sale of all of the remaining former fund and purchasing the new fund with those exact proceeds? Regardless, I believe I will have to adjust the resultant number of shares to match the shares on a given date reported by the brokerage. In what part of the Quicken program is this best accomplished? BTW, I am using Quicken Subscription 2019 on a Windows 10 laptop.

Sherlock

GEHKSH said:

Here are my last four questions:

You are correct that the three affected IRAs are with Fidelity, which reported fund MERGERS that occurred on 11/2/18 and 11/9/18. The problem has persisted primarily in the Total Market Index funds

I have exacerbated the problem by changing the fund call letters (not an actual mutual fund conversion) from FUSVX in two of the IRAs, to FSTVX, which is also in the third IRA. This was a mistake, because the conversion should have been from FUSVX to FXAIX in the first two IRAs.

Question #1: Should I convert the FSTVX funds in the first two IRAs back to FUSVX (if this fund still exists), or convert forward to FXAIX?

Question #2: Does the Mutual Fund Conversion wizard allow the conversion of the net total shares and value into the new fund total shares and value (actually add to existing share and dollar value balances), or does this have to be done for each of the hundreds of transactions?

Question #3: Assuming the conversions in Question #1 are successful, do I assume correctly that I could convert the FSTVX fund, which has always resided in the third IRA, directly into FSKAX? I hope that this conversion will clear up the five placeholders in this third IRA.

Question #4: Also in the third IRA, Quicken shows a cash balance as well as a separate balance in their FZDXX fund. My guess is that Quicken had to put leftover cash somewhere after my erroneous attempts to update the fund names and call letters without using the Conversion wizard (which I did not know existed). Is there a way, after all of the above, to manually correct the cash balances to match that which is reported by Fidelity?

Again, your patience and helpful nature are greatly appreciated.

GEHKSH (also not a CPA...)

#1:  The changes to the symbols should be reversed as they may have impacted security's price history.  Then, you should convert the mutual funds.

#2:  The conversion wizard will convert all of the shares of the security held in an account to another security.  The wizard will enter one Removed transaction for all of the original security held on the date and one Added transaction for the new security for each lot of the original security held on the date.

#3  Yes.  You should be able to remove the placeholder transactions entered due to the mishandling of the event.

#4   To resolve the cash discrepancy, I would reconcile the account with the statements obtained from the financial institution.

Sherlock

In Quicken, it is usually best to mimic the real world phenomenon.  In other words, if the shares of an original fund were sold and the proceeds used to purchase shares of another fund, it would certainly be appropriate to use a Sold and Bought transaction.  When you say one mutual fund was replace with another, you may mean there was a mutual fund conversion.  If so, I suggest you use the Mutual Fund Conversion wizard: open the account, select Enter Transactions and Mutual Fund Conversion from the Enter transaction: pull-down menu.  The wizard will introduce a Removed transaction and Added transactions to maintain the original cost basis.

NotACPA

By any chance, was this Fidelity's consolidation of various funds on 11/9/18? If not, could you please name the fund company, and one of those changes?

GEHKSH

I guess I responded to NotACPA via email, thinking that was the same person as Sherlock. I will try to copy my last four questions into this format, although Sherlock's response may well be the way to go.

GEHKSH

Here are my last four questions:

You are correct that the three affected IRAs are with Fidelity, which reported fund MERGERS that occurred on 11/2/18 and 11/9/18. The problem has persisted primarily in the Total Market Index funds

I have exacerbated the problem by changing the fund call letters (not an actual mutual fund conversion) from FUSVX in two of the IRAs, to FSTVX, which is also in the third IRA. This was a mistake, because the conversion should have been from FUSVX to FXAIX in the first two IRAs.

Question #1: Should I convert the FSTVX funds in the first two IRAs back to FUSVX (if this fund still exists), or convert forward to FXAIX?

Question #2: Does the Mutual Fund Conversion wizard allow the conversion of the net total shares and value into the new fund total shares and value (actually add to existing share and dollar value balances), or does this have to be done for each of the hundreds of transactions?

Question #3: Assuming the conversions in Question #1 are successful, do I assume correctly that I could convert the FSTVX fund, which has always resided in the third IRA, directly into FSKAX? I hope that this conversion will clear up the five placeholders in this third IRA.

Question #4: Also in the third IRA, Quicken shows a cash balance as well as a separate balance in their FZDXX fund. My guess is that Quicken had to put leftover cash somewhere after my erroneous attempts to update the fund names and call letters without using the Conversion wizard (which I did not know existed). Is there a way, after all of the above, to manually correct the cash balances to match that which is reported by Fidelity?

Again, your patience and helpful nature are greatly appreciated.

GEHKSH (also not a CPA...)

Jim_Harman

Q2: The mutual fund conversion removes the old fund and replaces it with the same total dollar value of the new fund, preserving the original cost basis and tax lots. You will end up with one Removed transaction and a bunch of Added transactions. 

Sherlock

GEHKSH said:

Here are my last four questions:

You are correct that the three affected IRAs are with Fidelity, which reported fund MERGERS that occurred on 11/2/18 and 11/9/18. The problem has persisted primarily in the Total Market Index funds

I have exacerbated the problem by changing the fund call letters (not an actual mutual fund conversion) from FUSVX in two of the IRAs, to FSTVX, which is also in the third IRA. This was a mistake, because the conversion should have been from FUSVX to FXAIX in the first two IRAs.

Question #1: Should I convert the FSTVX funds in the first two IRAs back to FUSVX (if this fund still exists), or convert forward to FXAIX?

Question #2: Does the Mutual Fund Conversion wizard allow the conversion of the net total shares and value into the new fund total shares and value (actually add to existing share and dollar value balances), or does this have to be done for each of the hundreds of transactions?

Question #3: Assuming the conversions in Question #1 are successful, do I assume correctly that I could convert the FSTVX fund, which has always resided in the third IRA, directly into FSKAX? I hope that this conversion will clear up the five placeholders in this third IRA.

Question #4: Also in the third IRA, Quicken shows a cash balance as well as a separate balance in their FZDXX fund. My guess is that Quicken had to put leftover cash somewhere after my erroneous attempts to update the fund names and call letters without using the Conversion wizard (which I did not know existed). Is there a way, after all of the above, to manually correct the cash balances to match that which is reported by Fidelity?

Again, your patience and helpful nature are greatly appreciated.

GEHKSH (also not a CPA...)

#1:  The changes to the symbols should be reversed as they may have impacted security's price history.  Then, you should convert the mutual funds.

#2:  The conversion wizard will convert all of the shares of the security held in an account to another security.  The wizard will enter one Removed transaction for all of the original security held on the date and one Added transaction for the new security for each lot of the original security held on the date.

#3  Yes.  You should be able to remove the placeholder transactions entered due to the mishandling of the event.

#4   To resolve the cash discrepancy, I would reconcile the account with the statements obtained from the financial institution.