Lots vs Average Cost Basis

sahurd

Does anyone have a clever way to have this distinction take place by account rather than by security? I unfortunately have different accounting methods across multiple accounts, such that the same security (let's call it ABC corp) is accounted for by lots in one account & average cost in another. Any thoughts???

q_lurker

First, it would be helpful for this discussion to know why you need to have the different systems in play for the different accounts.  That might avoid speculation and judgment about your processes.  Lacking that info, I'll offer two options. 

OPTION 1 - the conventional (?) approach.
You'll need two distinct securities.  One could be matched to an online security as downloaded from your brokerage.  I would think that would be the being handled 'by lot'.  You could edit the name in Quicken to reflect that (ABC Corp-by lot, or similar)

The second security would be handled as a totally manual entry (ABC Corp-AvgCost, or similar).  Create that through the Security List (Ctrl-Y), manual "Click here" option.  Do not give that security a ticker symbol initially.  After you have the security created, Edit the Security Details and add in the correct ticker symbol.  That way the AvgCost version will get it prices updated as you Download Quotes.  But downloaded transaction applicable to ABC Corp will not match to the ABC Corp-AvgCost security.  Those transactions you will have to manually enter.  

When a download does lead to a comparison of holdings, you should find that the program tells you the brokerage reports xxx shares of ABC Corp and Quicken reports xxx shares of ABC Corp-AvgCost.  if the xxx's match, you should be fine.

OPTION 2 - my untried creative approach
My attempt here is to still allow downloads of transactions to both accounts.  You'll still need the second security (ABC Corp-AvgCost).  You'll still need to create that as described above to get regular prices for it.

Under this option, you begin accumulating all shares in both accounts as if they are being treated as by-lot holdings.  When you start to sell off shares in the Avg Cost account, enter a MF Conversion macro-transaction in that account that converts all the existing (at that time) shares of ABC Corp to ABC Corp-AvgCost on a 1:1 basis.  You then sell off the desired number of shares. 

As time goes on, you continue to download transactions normally into this account acquiring more shares ABC Corp.  You'll get mismatches on the Compare Holdings check, since you'll own shares of both in this account.  The mismatches should balance.  When it is time to sell more shares, do the MF Conversion again.  The newly acquired ABC Corp shares will get added to the ABC Corp-AvgCost shares and a new average cost figured for the new sale.

CAVEAT -- I am not a user of or believer in Average Cost.  So I am not offering these two options based on positive experiences I have had.  Indeed, I just thought up Option 2 this morning.  If you want to try either approach, use a test file first, or have a good backup at hand ready for a recovery.  Be cautious and thorough in your testing and trials 

Either option requires extra work and may have unintended consequences.  Do you really need both approaches?

Good Luck and HTH

jr7107

For me personally it depends on tax rules. Identify your tax rules and then would follow the accounting accordingly if you depend on Quicken for capital gains/losses.

q_lurker

First, it would be helpful for this discussion to know why you need to have the different systems in play for the different accounts.  That might avoid speculation and judgment about your processes.  Lacking that info, I'll offer two options. 

OPTION 1 - the conventional (?) approach.
You'll need two distinct securities.  One could be matched to an online security as downloaded from your brokerage.  I would think that would be the being handled 'by lot'.  You could edit the name in Quicken to reflect that (ABC Corp-by lot, or similar)

The second security would be handled as a totally manual entry (ABC Corp-AvgCost, or similar).  Create that through the Security List (Ctrl-Y), manual "Click here" option.  Do not give that security a ticker symbol initially.  After you have the security created, Edit the Security Details and add in the correct ticker symbol.  That way the AvgCost version will get it prices updated as you Download Quotes.  But downloaded transaction applicable to ABC Corp will not match to the ABC Corp-AvgCost security.  Those transactions you will have to manually enter.  

When a download does lead to a comparison of holdings, you should find that the program tells you the brokerage reports xxx shares of ABC Corp and Quicken reports xxx shares of ABC Corp-AvgCost.  if the xxx's match, you should be fine.

OPTION 2 - my untried creative approach
My attempt here is to still allow downloads of transactions to both accounts.  You'll still need the second security (ABC Corp-AvgCost).  You'll still need to create that as described above to get regular prices for it.

Under this option, you begin accumulating all shares in both accounts as if they are being treated as by-lot holdings.  When you start to sell off shares in the Avg Cost account, enter a MF Conversion macro-transaction in that account that converts all the existing (at that time) shares of ABC Corp to ABC Corp-AvgCost on a 1:1 basis.  You then sell off the desired number of shares. 

As time goes on, you continue to download transactions normally into this account acquiring more shares ABC Corp.  You'll get mismatches on the Compare Holdings check, since you'll own shares of both in this account.  The mismatches should balance.  When it is time to sell more shares, do the MF Conversion again.  The newly acquired ABC Corp shares will get added to the ABC Corp-AvgCost shares and a new average cost figured for the new sale.

CAVEAT -- I am not a user of or believer in Average Cost.  So I am not offering these two options based on positive experiences I have had.  Indeed, I just thought up Option 2 this morning.  If you want to try either approach, use a test file first, or have a good backup at hand ready for a recovery.  Be cautious and thorough in your testing and trials 

Either option requires extra work and may have unintended consequences.  Do you really need both approaches?

Good Luck and HTH

sahurd

Thanks. Average cost is an unfortunate reality for my retirement account (where frankly I don't care about the lot information) & having lot information just complicates matters (when comparing to the brokerage records. But as I hold the same security in a regular brokerage account & there lot information matters, it seems like the best thing to do is to just deal with the difference for the retirement account, rather than complicating things.