How do I enter a mandatory exchange of a mutual fund?

Jeff B.

Wells Fargo did a mandatory exchange of SMVAX to SCVAX. These funds are held in ROTH IRA brokerage account. SMVAX had 1820 shares and was exchanged for SCVAX 820 shares.
I need to know how to enter this transaction and not lose past basis data.

K.O. (Win-Premier)

Sell SMVAX and buy SCVAX

Tom Young

It's a tax-free transaction so ordinarily you'd use a "Corporate Acquisition (stock for stock)" or a "Mutual Fund Conversion" action here, though since there's no income tax effect because the security is inside a Roth the only disadvantage to a Sold and Buy action should be a re-setting of the holding period.

I seem to recall that there's some problem, (or at least used to be a problem), with the "Mutual Fund Conversion" action if you choose to go that route, so make a backup.  Heck, make a backup before you take any action, in any case.

Jeff B.

I tried the mutual fund conversion but it wiped out past historical data on the fund. Would a Corporate Name Change work in this case? By the way this was a direct exchange. No price or cost information on the exchange was provided.

Tom Young

A corporate Name Change wouldn't affect the number of shares, and that's what you want to change while still maintaining the correct total basis, lot by lot.

You probably should try the "Corporate Acquisition (stock for stock)" action.  Just be aware that this will work in every Account where you hold SMVAX.  You might need to go into those other Accounts and delete the "Removed" and "Added" actions generated in them.

q_lurker

The Corporate Acquisition action will have the same effect as the Mutual Fund conversion action with respect to "wiped out past historical data".  I don't know what that phrase means.  Both approaches remove shares and add shares.  No historical information is changed by either approach..  I think there has been a misinterpretation.