What is the best way to enter a reinvested dividend with a service charge or commission

joev929

What is the best way to enter a reinvested dividend with a service charge or commission? Direct purchase plan shows gross dividend, service charge, net transaction, price per share, and finally increased shares. Currently I am entering the gross dividend and share increase, then in the commission I enter the commission as a negative number which then shows the total transaction at the net amount. Not sure if I am entering these correctly and would like other input.

NotACPA

Is this the form (from the Enter Transactions button just above the column headers) that you're using?  Because you can do the whole thing right there.

And don't worry too much about the $/sh.  The # of shares is MUCH more important.

joev929

Sorry I wasn't clear in my posting. I know where to enter the transaction but unsure of the mechanics.
1. If you enter the NET amount in the dividend section and the commission as a positive number the total equals the gross dividend total. Quicken creates 2 transactions, the dividend reinvestment and a Misc Inc for the service charge with a comment $XX paid as fee. It puts it to the Dividend Income category.
OR
2. If you enter the Gross amount in the dividend reinvestment and the commission as a negative number, Quicken creates 1 transaction. The net amount of the transaction in the total section matches the actual transaction.
From a tax standpoint the #2 option seems more correct as the dividend will seem to match the 1099 a the end of the year. However I have been using option 1 for quite some time.
Thanks!

UKR

IMHO, #2
You received a dividend of $100 for which 10 new shares were purchased.

Subtract from that the commission of $1.99 and the Total amount is $98.01

Do you download transactions from the brokerage?
If so, how many transactions of what type are received? For example, my brokerage typically transmits a Div received followed by a Buy (which includes Commission).

joev929

I do not download this particular one as I get a statement from the Shareholder services. It lists like this based on owning 200 shrs and a div of $0.61/shr:
Date Gross Amt of Trans Service Chg Net Amt of Trans Price/Share
4/9 $122.00 $2.00 $120.00 $5.00
Shar Incr
24

UKR

joev929 said:

I do not download this particular one as I get a statement from the Shareholder services. It lists like this based on owning 200 shrs and a div of $0.61/shr:
Date Gross Amt of Trans Service Chg Net Amt of Trans Price/Share
4/9   $122.00                 $2.00         $120.00              $5.00
Shar Incr
24

So, unless I'm mistaken, you received 24 new shares (24*$5), Commission $2.00
Fill out the form like this:

q_lurker

IMO, #2. 

What I see transpire in UKR's example above (your #1 description) is:

1. Two transactions entered - a ReinvDiv for $120 buying 24 shares, and a MiscExpX transaction for $2 transferred to the same account (thus no net cash change in the account) and categorized to _DivInc.   
2. The two transaction total to $122 of dividends received which is correct (I believe)
3. The shares acquired become a 24 share lot with a basis of $120.  I believe that is incorrect, the basis on those shares should also be $122.  

What I see using your #2 case is the one ReinvDiv transaction recorded generating the 24 shares with a $122 cost basis and the full $122 reported as Dividends.  The $2 commission just gets dropped for the most part, and I am OK with that.

Another option is for you to manually enter two transactions -- a regular Dividend ($122) and a buy shares (24 shares for $5/share + $2 commission totaling $122).  That will sort of track your commissions, if that is at all important to you.  (This is what UKR's broker transmits to him.)