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Mutual fund share transfers between accounts

Quicken Deluxe (CDN) on the transfer of shares does not maintain the lot cost basis but uses the average cost basis of the shares. These transfers are not considered sales but are switched to a different account classification (for reduction of redemption fees) on FIFO as these shares mature. It is important to carry forward the lot cost basis to correctly calculate, on future sale, the average cost basis as required for taxation by Revenue Canada. Quicken does not do this; causing a great deal of error and resulting conflict with Revenue Canada. Quicken has for years calculated all transfers on an average cost basis which requires a great deal of effort to correct and manage.

I would like to see the option to choose that the lot cost basis be maintained on transfers. Also that a standard transaction report on these transfers be generated that shows lots and costs between accounts.
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  • Chris_QPW
    Chris_QPW Member ✭✭✭✭
    Note to Moderators, this needs to be turned into an idea so that people can vote on it.

    @HF in the future for suggestions you should submit them as "Ideas":

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    (I'm always using the latest Quicken Windows Premier subscription version)
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  • HF
    HF Member ✭✭
    If you look through the comments for Quicken Windows, the US versions has this ability. For what ever reason the Canadian version doesn't have it.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    I am not so sure that the US version does those things right either.  It strikes me as a more complex problem than many users understand.  But I'll also admit I have no idea how Revenue Canada expects this to be handled.  

    Example:
    You buy 10 shares for $10/share = $100 basis
    You buy 10 shares for $100/share = $1000 basis
    You sell 5 shares. 
    Since your total basis is $1100 and you are selling 5/20ths (1/4) of your holding) the basis on the sale should be $275, leaving a basis of $825 (Average cost = $55/share). 

    In the US version with average cost checked, I believe Quicken treats that as a FIFO sale of 5 of the first 10 shares even though the Cap gains report will properly show the basis sold as 5 * 55 = $275.  .

    If you then transfer the remaining 15 shares to a different account, the program does the Remove Shares & Add Shares transactions,  The Add Shares add in as 5 shares @ $10/share and 10 shares @ $100/share (both original cost) for a total of basis of $1050 (not the $825 it should have been).  I'd expect the same misapplication for a MF conversion or Corporate Acquisition event.

    I would think the Add Shares transaction should come in at the applicable average cost basis value ($55/share), but there may be challenges associated with that choice also.  

    There is definitely a nuance to the use of average cost basis that should be addressed and corrected, but that correction is not clear to me as it applies to both historical transactions, and current tax laws and regulations (both US and Canadian).
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