closing DRIP

scottpeterson057

Synopsis: moved shares from a company's DRIP to my brokerage account, want to make sure I handle the DRIP properly.

Details:

I've been enrolled in a company's DRIP program for over 30 years. These guys have never (AFAIK) had a live connection Quicken could use, so I have hundreds of manually-entered transactons (not sure that's germane, but there it is).

They recently made the DRIP less attractive, so I had them transfershares to my brokerage account. Those shares showed up in my brokerage account today, with a single line-item for added shares.

I guess it's really two questions:

1) Do I need to do anything on the borkerage account side for all the transactions I had in the DRIP for all those years? If so, what?

2) Once that's done, what's the right way to handle the DRIP account in Quicken? Is just hiding it sufficient, or something more detailed?

Thank you in advance. I'll start by makng a backup before I start fiddling of course.

Tom Young

"1) Do I need to do anything on the borkerage account side for all the transactions I had in the DRIP for all those years?"

I assume that you've done nothing in Quicken at this point, that your statement about the shares showing up in the brokerage account refers to the actual account at the brokerage firm, not an Account you created in Quicken and updated with a download.  I also assume that the cost detail wasn't passed on by the company to the broker.

ASSUMING that you've entered all those re-investments correctly, (did the company provide some sort of statement that allowed you to check your work and make corrections?), and that the number of shares shown in as being added matches your Quicken "total shares" figure, then I'd first try to see if you can rename the Account in Quicken, enter the new broker's name in the "Financial Institution" box and connect with the new FI.  If you download an "Add" action with the same number of shares already in the Quicken Account, simply delete the download and you should be good to go.  Your old DRIP Account should just carry on.

Jim_Harman

Another alternative would be to enter a Shares Transferred Between Accounts in Quicken to move the shares from the DRIP account to the "borkerage" account. This will create one Removed transaction in the DRIP account for all your shares and one Added transaction in the brokerage account for each tax lot of the DRIP account, preserving the cost basis for all your tax lots. This will take some time for 120+ transactions, so be patient. Back up your data file first, in case something goes wrong.

If you downloaded an Added transaction from the brokerage, you should delete it.

Tom Young

"1) Do I need to do anything on the borkerage account side for all the transactions I had in the DRIP for all those years?"

I assume that you've done nothing in Quicken at this point, that your statement about the shares showing up in the brokerage account refers to the actual account at the brokerage firm, not an Account you created in Quicken and updated with a download.  I also assume that the cost detail wasn't passed on by the company to the broker.

ASSUMING that you've entered all those re-investments correctly, (did the company provide some sort of statement that allowed you to check your work and make corrections?), and that the number of shares shown in as being added matches your Quicken "total shares" figure, then I'd first try to see if you can rename the Account in Quicken, enter the new broker's name in the "Financial Institution" box and connect with the new FI.  If you download an "Add" action with the same number of shares already in the Quicken Account, simply delete the download and you should be good to go.  Your old DRIP Account should just carry on.

Jim_Harman

Another alternative would be to enter a Shares Transferred Between Accounts in Quicken to move the shares from the DRIP account to the "borkerage" account. This will create one Removed transaction in the DRIP account for all your shares and one Added transaction in the brokerage account for each tax lot of the DRIP account, preserving the cost basis for all your tax lots. This will take some time for 120+ transactions, so be patient. Back up your data file first, in case something goes wrong.

If you downloaded an Added transaction from the brokerage, you should delete it.

scottpeterson057

Tom,

Sorry, I wasn't specific enough. No, what I'm referring to by "showing up" is in Quicken. When I did my update last night, my already-existing brokerage account shows a new transaction of shares added for this new security (new to them, not to Quicken).

In terms of the (re)investments over the years, yes. Each purchase or divident reinvestment was documented with a paper trail, which I've kept over the years, and entered into Quicken.

What I was told by the brokerage customer service rep when we were beginning the process is that the DRIP company would be required to proivde all transactions over the years (including things like splits or spin-offs) so the brokerage could have proper cost basis in the event I ever sell. I do see transactions in the brokerage account's cost basis area, so that's good.

Jim,

Good catch on "borkerage". Thanks for the alterative idea.

Both,

Thank you very much for the advice.

It seems that only the whole shares transferred (even though there was a box on the form to transfer all). Once I get the final paper from the DRIP company, I'll be able to take care of the partial share I'd accumulated, then handle the transferred shares.

Doing a backup first of course!

q_lurker

A few comments on this from my perspective:  
a)  Just because a brokerage gets all the lot-specific details does not mean that such data gets presented in a downloadable for to you, the user.  In my case, within the last year, assets were transferred from one brokerage to another.  The receiving account initially just presented the share numbers and current values; no basis information.  Subsequently,they got or followed through with corrections to the basis (possibly by lot, I am unclear at the moment).  There were never any 'transactions to download those basis 'adjustments'.  My bottom line - I don't trust the receiving end to transfer all the data necessary. 

b) DRiPs are unusual in that they frequently operate with fractional shares.  That is something brokerages are not willing (or allowed?) to do.  Thus, if you had lots of 1.234 shares and 2.987 shares for a total of 4.221 shares, I would expect the DRiP transfer to the brokerage 4 shares and for the to sell the 0.221 fractional share sending the cash to you or to the brokerage.  What fractional 0.221 share did they sell?  

c)  In your shoes, I would be using (as Jim noted) the Shares Transferred between Accounts macro-transaction to move the shares from the DRiP account to the brokerage account.and a Sell shares for the fractional share (in one account or the other).  That will keep track of all the individual lots, their acquisition dates and their cost basis (to the extent you had all that in the Quicken DRiP account).  But whether your broker carries forward with that level of specificity, I can't say. 

Once that action is taken, The Quicken DRiP account will have nothing in it - no $-value.  It can be closed (not usually my choice), hidden (sometimes a valuable approach), or carried along with no monetary value.  Just do NOT delete it!  It does hold valuable information.

   

scottpeterson057

Thanks all, seems like everything went o.k.

Got the papers from the DRIP company today, they show a DRS withdrawal for the whole shares, leaving me with .002 of a share. Despite me checking the box which said to move everything.

Sigh. Well, no big deal.

Anyway, found the transfer option, schlepped the shares from DRIP to brokerage, then deleted the downloaded brokerage transaction.

Next, updated my brokerage only to be sure that transactoin wouldn't re-download. Everything OK.

Then, did the One Step Update on all accounts, seems like everything downloaded. I believe I'm good.

Of course, did a backup before starting this adventure and one at the end, so I have a point to go back to if I later realize something went wrong.

Thanks again.