Capital Gains Report showing Stocks NOT Sold

Ron n Round Rock

What's going on with the Capital Gains Reports. Everybody seems to be complaiing about missing entries WHEREAS I am complaining about false entries in my Capital Gains Report. I am closing out some accounts and have had to move securities from one account to the other (Remove and Add).

I have a bunch (5+) of Stocks that are listed as being Sold in my Capital Gains Report, but I have not sold any of them. There is a consistency in the problem - 5 stocks in the report were Removed from my Fidelity account and Added to my Merrill Account - YET they are all being reported in the Cap Gains Report as being Sold on the date they were Removed from the Fidelity account AND the Gross price and the Cost Basis are the same, yielding a 0.00 Realized Gain. Additionally, most of the Cost Basis being reported are accurate, but some are not.

And just to dispell this problem being just the Fidelity stocks, I have 2 other Stocks doing the same thing, but they were tranferred from one Schwab account to another Schwab account. But the common thread is that they were Removed from one account and Added to another account.

When I click on the line item in the Capital Gain Report, Quicken takes me to the Remove entry in the Fidelity account. I have re-cut and pasted the Remove entry, broutht up a NEW Capital Gains Report from the Quicken list, reloaded Quicken - and nothing seems to halp. Any idea as to what is going on here. Oh, and yes, I have a bunch of other stocks that were moved to different accounts and they are being processed correctly.

ron, was in round rock, now in kansas

q_lurker

Capital Gains report has "always" included shares Removed in addition to shares actually sold.  Since the net gain on the removal is $0.00, the inclusion has no real effect on tax computations.  

My spin (not based on any inside information) on the decision on the part of the program specifications has been "It is better to include the data for the user to be aware of, rather than omit the data the possibly the user should be thinking about with respect to possible gain situations."  In other words, Quicken is choosing to recognize that a Shares Removed is an ambiguous event and may somehow entail what should be reported as a sale. 

Remember that once the Shares Transferred has created the Remove and Add transactions, those two are disconnected.  They are not tied together like a cash transfer between spending accounts.  When Quicken sees the Remove Shares transaction, it does not scan through to see if they are balanced against Add Shares somewhere else.  

Tom Young

Yep, to the best of my knowledge and belief Quicken's Capital Gains Report has always behaved in the fashion you describe.  Slightly disconcerting at first, but easily overcome with a little report customization.

Ron n Round Rock

q.lurker - good to see you still around (been a while since I posted) - and thanks for the feedback. I will gladly accept your explanation as to what is going on and will try not to get too anal over it.

I am trying to get a handle on my year-end tax situation and when I ran the Capital Gains Report, I had a lot of missing Cost Basis entries in the Report, for many of the stocks that were moved (that I had sold). Traced that to the "Added" entries not containing information of the original stock purchase (amount & date) - so when I updated the Added entries, everything came out great.

The only thing that is confusing is that in the process of moving (Remove & Add) the stocks, I updated about 20 Added entries today across about 3 accounts that were closed - and out of the 20, only about 7 false entries showed up in my Capital Gains Report. But yes, many were from accounts from 2018, so maybe that is why all 20 did not show up in my Capital Gains Report - in fact, now that I think about it, that is likely exactly why the discrepancy. I didn't touch the Remove entries, but all were paired with the Added entries that I updated. AND YES, all of the un-sold stocks in the Report had 2019 Sold dates on them.

And one last really funny thing, at least to me, is that a couple of stocks in the Capital Gains Report showed up with 2 entries in the list whereas the Add and Remove were single entries for the entire number of shares (even though I may have mad 2 or 3 purchases of the stock). But in checking this problem out to see if I could figure out what is going on, one of the NEW Capital Gains Report that I ran had the stocks reported as separate Short and Long Term capital gains - and that is probably what is going on there (my original report was just based on Accounts) - so Quicken is just going above and beyond in that situation and doing its job.

Sorry for the long post, but just doing this for my own benefit in analyzing what is/was going on and for any other people that might come across the same situation and wonder what is going on.

Again, thanks for the information. I am sure you have nailed it for me - particularly why some stocks showed up and other didn't (only 2019 Sold, Remove stocks showed up in the Report).

ron, was in round rock tx, now in kansas

Ron n Round Rock

And sorry, but for both of you, thanks for the really quick response.

ron in kansas

Tom Young

@Ron n Round Rock

I got the impression, based on your post, that in the past you've manually entered "Removed" and "Added" transactions.  While that's a technique that you sometimes have to resort to in some situations, if the "situation" is one where shares are actually moved between Accounts it much better to use Quicken's built-in "Shares Transferred Between Accounts" wizard.  That ensures that all lot-level data - number of shares, acquisition date, basis - flows seamlessly between the Accounts, while if you do your own manual entries of Removed and Added transactions it's easy to make a mistake and omit some of that detail.

Ron n Round Rock

Tom,

No, I didn't manually enter any of the Remove and Add transactions - I did use the "Transfer shares between Accounts" transaction, and Quicken did the rest. The only problem was that on the Added transaction, Quicken did not fill in the Price Paid, Total Cost and Date Acquired fields - undoubtedly a daunting task for multiple purchases with different dates - which is why I had to go back and manually insert, update this information in the Add transactions.

After doing those updated, the Capital Gains Report came out correct, except for the noted funny entries, which you and lurker have straightened me out on.

Does Quicken normally fill in those fields if I did everything correctly. If Quicken was supposed to fill in that stuff, then I must have missed something when I did all of the transactions - many months back, so I don't remember the details of the transactions.


ron in kansas

Jim_Harman

Yes, when you use the Shares transferred between accounts macro-action Quicken normally fills in the acquistion date and total cost for the Added transactions. Of course if that information was not provided in the source account, for example if the shares were originally Added to the source account without the cost basis info, Quicken can't fill it in.

If you go to the source account, click on Holdings, set the date to the day before the transfer, and click on the plus sign next to the securities, do you see the correct cost basis for the problem lots?

Note that once you have entered the transfer, fixing the transactions in the source account will not affect the Added transactions in the destination account. 

Tom Young

@Ron n Round Rock

Your description of what happened when you used the Transfer Shares Between Accounts action is not normal.  All detail should carry over to the new Account.

I did a test on a copy of my live file, using the Transfer Shares Between Accounts action to move one security into a new test Account I'd established.  After a bit of a delay - the cash register CA-CHING sounded something like 70 times - all the detail showed up correctly in the test Account.

Ron n Round Rock

OK, Tom - I just don't remember doing anything special when I moved the shares - however I do know that I did not manually add the Remove and Add transactions. It appears all the work is on quicken since the "Transfer shares between accounts" only asks for total shares to transfer. I suspect it is a lot of work for quicken to track down individual purchases for a stock that has multiple purchases, but if it is supposed to work, I must have done something wrong or missed something somewhere.

All of the original purchases were in the various original accounts - that is where I found the information to fill in the missing details in the Add transaction. I closed (combined) a couple of accounts in my Merrill account last October and I closed and moved the Fidelity account into one of my Schwab accounts. I think I am pretty much done with consolidating my accounts for now, but will pay more attention to what I am doing if I end up doing this again in the future.

OH WAIT, maybe I am mis-remembering. IT IS POSSIBLE that Quicken might have done this all on its own based on information downloaded from the financial institution (IS THAT POSSIBLE). Anyway, I will let it go and be more observant in the future, particularly making sure the Cost Basis information is filled in on the Add transaction.

Thanks for the help.

ron in kansas

q_lurker

Ron n Round Rock said:

...

OH WAIT, maybe I am mis-remembering. IT IS POSSIBLE that Quicken might have done this all on its own based on information downloaded from the financial institution (IS THAT POSSIBLE). Anyway, I will let it go and be more observant in the future, particularly making sure the Cost Basis information is filled in on the Add transaction.

Thanks for the help.

ron in kansas

That's the problem.  The downloads from the FIs do not include cost basis information.  That is why the standing recommendation is to use the Shares Transferred function and NOT rely on the brokerage downloads.

Ron n Round Rock

OK, lurker, you and Tom are probably right. I guess the financial institutions just moved the shares at my request - and subsequent downloads reflected those changes. I don't know if the financial institutions provide that information or if Quicken figures it out itself (I'm sure you guys know).

Anyway, I know I didn't insert those Remove and Add transactions in my accounts - and will have to back off of my thinking, saying I used the "Transfer shared between Accounts" transaction to produce those entries - I guess an affliction of getting old and forgetful. I think I might have been amazed that all that stuff (the Remove and Add transactions) were magically appearing in my Quicken accounts - and had just set back, watched and thought everything was OK.

Glad now that I asked the original question about the Capital Gains Report because I have learned a lot from the additional exchanges. Thanks to both of you.

ron in kansas

Tom Young

Quicken doesn't "do your accounting for you" it helps you do your accounting.

You don't want to be in the position of just blindly "accepting" transactions downloaded from financial institutions without understanding if the transactions are correct in the first place.

It happens that even when an entire transaction occurs within one Financial Institution (FI) - a movement of shares between accounts within the FI, stock for stock acquisitions, etc - the accounting coming out of the FI is wrong.  The number shares probably is correct but basis and holding period information are often overlooked entirely, cash in lieu is frequently simply "Added" to an account instead of being recorded as a fractional share, etc.

Ron n Round Rock

Yes, I understand. now. It wasn't quite a blind acceptance of what was going on because I do understand that this is the way Quicken handles the movement of stocks from one account to the other (i.e. the Remove and Add pairs) and everything appeared good on the surface. I guess I just didn't look deep enough to pick up on the missing stuff in the Add transaction - and was somewhat amazed that everything "seemed" to be OK - and the only thing what was really affected was the Capital Gains Report.

But let me go ahead and ask - concerning the generation of the Remove and Add transactions. Does the financial institution download something to Quicken that tells Quicken to create these transactions OR does Quicken look at the downloaded stock information and figure out that the account has a new stock (with no Buy transactions) and just generate the Add transaction on its own - and the same question regarding stocks missing from a download, does it cause a Remove transaction to be generated.

Just how much power, control, smarts does the financial institution have in this.

And as I mentioned, I was trying to get a handle on my tax situation for next year - and as a sidebar, for instance, have wondered what will happen to the stocks I moved from Fidelity to Schwab - if the Cost Basis is also supplied to Schwab in those moves or at tax time, when I download the Sold stock transactions (into TurboTax) from Schwab, will they come down with an accurate Cost Basis, including Long and Short Term gains or am I going to have to fill in that information myself (which was another one of the reasons I was fooling around with Capital Gains Reports at this time of the year).


ron in Kansas

q_lurker

The FI pretty much downloads the actual transactions -- Add Shares and Remove Shares.  Been a while since I looked at the negotiated specs for the OFX file format.  I can't say if the lot acquisition date and cost basis are included as possible fields for that communication link.  But as far as I have seen (a very limited view), the FI has never filled in that data.  

There are cases where Quicken will offer some alternatives.  I am thinking of Stock Splits where I have seen Quicken 'ask' if the user wants a split, or and Add Shares, or some other option.  The general rule is that whatever the FI sends, Quicken uses.  

For transfers between FIs, I am now seeing the sending FI somehow communicate to the receiving FI what the lot and cost basis information is.  Sort of a requirement now that the FIs have to report basis info to the IRS.  So that info is getting communicated.  Just doesn't seem to come back to the Quicken user in a download stream.  So upon selling shares our of the new FI (Schwab), they should be providing you accurate gain/loss info on your EOY 1099B forms.

Ron n Round Rock

OK, thanks lurker. I have always wondered how integrated the FIs were into Quicken (there is obviously quite a bit of intimacy involved there) - but maybe it is all in the OFX file formats - which were probably designed by a bunch of smart guys to handle all of these situations, taking into account that there is other SW out there besides Quicken.

I don't want to get side-tracked here, but as an old software guy, I would sure like to see the specs on the OFX protocol - which I am sure would explain a lot.

Anyway, I suspect what you say is true, about the FIs now being required to supply this information between themselves since the FIs also have to supply a lot of the 1099 information to the government. But just in case all of that stuff is not in place yet, I wanted, and will be able to via Quicken, be ready to supply that information myself, and also to check the FI TurboTax downloads for accuracy, which I have been doing every year - and have been amazed at how accurate the information downloaded into TurboTax is.

I can even remember when, way back when before TurboTax, I used to do all of my tax returns based on my Quicken records. Thinking back on those days, I NEVER cheated, but I don't know how the IRS could every know what was really going on in your tax return without an audit. Well, too late now to begin cheating, not that I would - don't need those headaches and I have always slept well at night.

You guys are great, taking time to help me out with all my questions and musings.

ron in kansas

q_lurker

@Ron n Round Rock:  GIYF  https://www.ofx.net/

Tom Young

The OFX schema is publicly available.  Google "OFX schema" and you'll get various hits. 

Just casually looking at the "Removed" and "Added" transactions download by the "from" and "to" financial institutions you could be excused into thinking that somehow the "Shares Transferred Between Accounts" wizard was involved.

Ron n Round Rock

Ok, thanks guys - both of you.

ron in kansas

Ron n Round Rock

OH, one last thing I might mention. I RARELY add any of the information (i.e. enter the transactions myself) downloaded into Quicken BECAUSE the information downloaded from the FIs is so accurate.

I run weekly Balance checks on all of my accounts (half-dozen +) and am amazed that quite often the Balances carried in Quicken match, to the penny, the Balances in the FIs. I am astounded each week at how accurate they are.

And at tax time, I compare the information on my 1099's (not only stock sales, but interest and dividend information) to the information I have in Quicken , and again am amazed at how accurate everything is. Occasionally I will run down a few pennies that are missing, but that is my anal side coming out.

And of course, I double check the TurboTax downloads and everything is always so accurate that I have wondered why I bother double-checking the TurboTax downloads, but again, my anal side will probably keep me doing those extra checks.

So this is my excuse as to my current issue. I don't enter the Buy, Sell, etc. transactions - I depend entirely on the Quicken interchange with my FIs to do that.

In fact, I don't know what would happen if I entered things like the Buy, Sell, Transfer shares myself - probably get a lot of duplicates that I would have to straighten out. For instance, I do enter my Bill Pay checking information myself (to get names on the payments for my Reports) and spend a lot of time straightening out the "Match" operation on the downloads from the Banks.

I think you know what I am saying here. My life, my financial life, so-to-speak is in Quicken, going back I'm sure for 30+ years. It is a great program - long live Quicken, and the folks like you that are supporting it. There would be no place to go for questions and support like this.

ron in kansas

Ron n Round Rock

OK, I guess I just thought I wanted to see the OFX specs and protocol - but gee, that thing is 700 pages long.

ron in kansas

Tom Young

"In fact, I don't know what would happen if I entered things like the Buy, Sell, Transfer shares myself - probably get a lot of duplicates that I would have to straighten out. "

No, you shouldn't, though I'll admit that I too frequently depend on downloads - which I review before accepting them into the transaction list (register) -  instead of making every entry manually.   But entering transactions manually should not result in duplicates. 

You enter your transaction(s) manually, do a subsequent "One Step Update" or "Update Transactions", making sure that downloads are not automatically entered into Quicken, and the transactions downloaded either "match" your correctly-entered manual entry(s), in which case you accept the transaction, or they don't, in which case you figure out what you did wrong, and correct it. 

Ron n Round Rock

Tom, yes, that is pretty how I operate - the only exception that comes to mind is the individual Check (and Bill Pay) information - which pretty much has to be entered manually if you want to keep track of everything. The only thing I am weak on is updating the Categories field on the downloaded credit card information. I do love Reports.

ron in kansas