Changing lot identification after the fact

MichaelCortese

I had several sales of stocks in 2019 and selected average cost for calculating the gains in Quicken. It turns out at my broker they used FIFO (which I guess is their default). Is there a way to update this in Quicken without making a mess so my capital gains are correct and basis is correct?

q_lurker

You should be able to edit each sale and respecify the lots.  (BACKUP FIRST!)

It is only likely to make a mess if your processes before this year (2019) were not consistent with your brokerage.  I suggest taking it one security at a time and checking carefully as you proceed.  Working from January through December is likely the best approach.

I am not clear how Quicken applies an "average cost" to a stock sale when that specific security is not tagged in Quicken as making "Average cost" applicable.  In the US, that option should only apply to mutual fund securities.  

Frankx

@Michael,

You should be able to delete the sale transaction and replace it with a new sales transaction. Quicken retains your historical data (buys, sells, etc.) so after you delete the sell transaction, Quicken will reflect your original position before your original sale entry, including tax basis for this security. 

Before you delete the transaction, make sure you write down all the specifics of the transaction (date, number of shares, sales price, commission, etc.) so you can easily re-enter the transaction. When you re-enter the sale transaction information, make sure that you click on the "Specify Lots" box and select "First Shares In" which will then conform the sale transaction to your broker's records.

MichaelCortese

> @Frankx said:
> @Michael,
>
> You should be able to delete the sale transaction and replace it with a new sales transaction. Quicken retains your historical data (buys, sells, etc.) so after you delete the sell transaction, Quicken will reflect your original position before your original sale entry, including tax basis for this security. 
>
> Before you delete the transaction, make sure you write down all the specifics of the transaction (date, number of shares, sales price, commission, etc.) so you can easily re-enter the transaction. When you re-enter the sale transaction information, make sure that you click on the "Specify Lots" box and select "First Shares In" which will then conform the sale transaction to your broker's records.

I deleted the sale transactions (from newest to oldest for 2019/2020). When I entered the 1st sale for 2019 it would not let me pick lots. The option was greyed out in the transaction box.

Frankx

@Michael,

Please see this guidance, which is specific to your using the average cost method'https://www.quicken.com/support/switch-tracking-basis-security-lot-identification-average-cost

MichaelCortese

> @Frankx said:
> @Michael,
>
> Please see this guidance, which is specific to your using the average cost method'https://www.quicken.com/support/switch-tracking-basis-security-lot-identification-average-cost

That didn't work (I tried the 2nd option). Specify Lots is disabled in the investment form.

The first option won't work because prior sales were average costs before 2019.

NotACPA

@MichaelCortese Are you in the US or Canada?  In the US, "Average Cost Basis" is only permitted for Mutual funds.

MichaelCortese

> @NotACPA said:
> @MichaelCortese  Are you in the US or Canada?  In the US, "Average Cost Basis" is only permitted for Mutual funds.

The US. Though that is technically true, with specific identification you can do an average cost.

NotACPA

NO, you can select specific lots to sell, which you must inform the broker of that choice as you place the trade ... but that's not the same as Average Cost where your total cost for the fund is spread over the entire holding of that fund.

MichaelCortese

I understand.

Buy:
100 shares @ $50
100 shares @$60

Sell:
50 shares bought @$50
50 shares bought @$60

Cost basis= $55. Same as average cost

Specific identification which is what I said above.

MichaelCortese

I'll add I bought them all on the same day, so other than taking into account dividends this is probably moot for 2019. It may be just a few dollars difference which should show on my 1099.