How to record AbbVie (ABBV) merger with Allergan (AGN)?

M C Crockett

Quicken (Mac) doesn't support corporate acquisitions (merger) transactions and the OFX specification doesn't provide a method to provide all needed information regarding a merger.

In consideration for the merger, shareholders of Allergan (AGN) were to receive $120.30 in cash and 0.8660 shares of AbbVie (ABBV) for each share of Allergan (AGN) owned on 11 May 2020.  The following OFX data download contained the following transactions.

1. <TRANSFER><INVTRAN><FITID>378442300000071200511011234128<DTTRADE>20200511120000.000[-5:EST]<DTSETTLE>20200511120000.000[-5:EST]<MEMO>Delivered 417 shares 05/11/20 MERGER @$120.3000/SHR ALLERGAN PLC SHS (IRELAND)</INVTRAN><SECID><UNIQUEID>G0177J108<UNIQUEIDTYPE>CUSIP</SECID><SUBACCTSEC>OTHER<UNITS>-417<TFERACTION>OUT<POSTYPE>SHORT</TRANSFER>
2. <TRANSFER><INVTRAN><FITID>378442300000071200511011234144<DTTRADE>20200511120000.000[-5:EST]<DTSETTLE>20200511120000.000[-5:EST]<MEMO>Received 361 shares NEWSEC@000.86600 FOR 001.00000 ABBVIE INCORPORATED</INVTRAN><SECID><UNIQUEID>00287Y109<UNIQUEIDTYPE>CUSIP</SECID><SUBACCTSEC>OTHER<UNITS>361<TFERACTION>IN<POSTYPE>LONG</TRANSFER>
3. <TRANSFER><INVTRAN><FITID>378442300000071200511011234160<DTTRADE>20200511120000.000[-5:EST]<DTSETTLE>20200511120000.000[-5:EST]<MEMO>Received 0.122 shares NEWSEC@000.86600 FOR 001.00000 ABBVIE INCORPORATED</INVTRAN><SECID><UNIQUEID>00287Y109<UNIQUEIDTYPE>CUSIP</SECID><SUBACCTSEC>OTHER<UNITS>0.122<TFERACTION>IN<POSTYPE>LONG</TRANSFER></INVTRANLIST>

The first transaction indicates that 417 shares of Allergan were to be removed from the account at a price of $120.3000 per share.  This should have resulted in a $50,165.10 increase in the accounts cash value.  Unfortunately, Quicken recorded the value of the transaction as -$80,489.34, the current market value of the shares.

The next two transactions indicate that 361.112 shares of AbbVie were received for the 417 shares of Allergan without a cost basis for the shares.  There was the following additional entry in the OFX file indicating that AbbVie had a current market value of $87.900 per share.

1. <STOCKTYPE>COMMON<YIELD>.00<DTYIELDASOF>20200511120000.000[-5:EST]<FIASSETCLASS>Equities</STOCKINFO><STOCKINFO><SECINFO><SECID><UNIQUEID>00287Y109<UNIQUEIDTYPE>CUSIP</SECID><SECNAME>ABBVIE INCORPORATED<TICKER>ABBV<UNITPRICE>87.900</SECINFO>

The basic problem with how the transactions were processed by Quicken (Mac) is that the cash balance of the account is $50,165.10 less than it should be.  As the transactions occurred in a tax-deferred IRA account a simple solution would be to change the remove shares transaction of the Allergan shares to a Sell transaction  for $50,165.10 and ignore calculating the correct cost basis for the AbbVie shares.

Were the shares held in a taxable investment account, one would need to calculate the cost basis for each lot in order to determine the capital gain or loss when the AbbVie shares were sold.

It is extremely important for the corporate acquisition (merger) and corporate divestiture (spin-off) transactions to be supported in Quicken (Mac).  The were promised to be added in 2016 but have not yet been added in 2020.

M C Crockett

Another problem with the absence of a corporate acquisition (merger) transaction in Quicken (Mac) is that the holding period of the above AbbVie share holdings is that they are reported as short term holdings based on the date of the Add shares transaction and not on the individual acquisition dates of the Allergan share lots.

This impacts the Tax Schedule report if the AbbVie shares are sold before 11 May 2021.  The sales would be classified as short-term gains of losses instead of long-term gains or losses were the shares held in a taxable investment account.

BB3

As informative as this is, it still doesn't answer the question of how to enter the cash/stock merger transaction into Quicken. I screwed one up when a Dreyfus Bond Fund merged with a BNY fund a year and a half ago and it still incorrectly reflects the shares. so, how do i do this?