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Quicken Classic for Windows
Investing (Windows)
Mutual Fund Reorganization
Rick Milton
One of my mutual funds has been "reorganized" into a different fund name. The amount of share of the old fund is not the same as the new fund. How do I book this?
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Sherlock
Always save a backup before making significant changes to the Quicken file: press
Ctrl + B
You should be able to use the
Mutual Fund Conversion
wizard: open the account, select
Enter Transactions
and
Mutual Fund Conversion
in the Enter transaction pull-down menu. I suggest reviewing the cost basis produced for accuracy.
If the
Mutual Fund Conversion
wizard doesn't work properly, I suggest you consider using the
Corporate Acquisition (stock for stock)
wizard instead. The
Corporate Acquisition (stock for stock)
wizard appears to do a better job but will convert the security across all accounts. If you there are accounts that should still hold the original security, you can delete the
Removed
and
Added
transactions to restore the holding.
Boatnmaniac
Is the ticker symbol for the new fund different from the old fund? If you download transactions from your broker, just do the download and the transactions should accurately reflect how it was managed.
If you are manually entering your transactions: Log in to your online broker account and see how they managed the transactions. In all likelihood they sold all your old fund shares and used the proceeds to buy the new fund shares. If that is the case, I would do the same thing. First, add the new fund security to your Security List. Then enter a sell transaction for all shares of the old fund. Then enter a buy transaction of the new fund. Be sure that your sell and buy share prices for each fund match what the broker shows.
Jim_Harman
In my experience, downloaded transactions seldom preserve the cost basis correctly when there is a share class conversion. The FI generally has the correct information (or will eventually) but it is not reflected in the downloaded transactions.
For example, you will often see one Removed transaction for the old fund (which is correct) but only one Added for all the shares of the new fund, which is not correct if you held multiple tax lots in the old fund. The correct set of transactions is produced by the Mutual Fund Conversion, which creates one Added transaction with the original acquisition date and cost basis for each tax lot.
One problem with the Mutual Fund Conversion comes when you have selected the "Use Average Cost" option for the security. In the case Quicken incorrectly assigns the full cost basis to each lot of the new security, which leads to a greatly inflated cost basis.
Rick Milton
Thanks -- the symbols are different and I don't download. I have 3 different funds in this Investco account, one of which is changing. So I think I'll see if the sale/buy is best. The problem is I don't have an online account with them and the statement was VERY criptive (as usual).
Jim_Harman
Sell/Buy is OK if this a tax deferred account and/or you are not tracking cost basis in Quicken. Otherwise you should use one of the other methods we have recommended above.
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