Adjusting Cost Base from PUT Options

Whirly

Under Canadian Tax Law, when I sell a PUT option and get assigned the shares I can adjust the cost base of the shares by the amount of the premium I received for selling the option. This is a non-cash transaction and is just an adjustment to the ACB for the shares. How do I do this in Quicken 2014? I assume new versions have corrected this deficiency.

Tom Young

US Tax Law is the same in this area. 

A similar event is when (in the US) you receive a 1099-DIV that indicates some of the quarterly "dividends" you've received for a particular stock, and recorded in Quicken for the year, are classified on the 1099-DIV as return of capital.  This situation is easily handled in Quicken by recording year-end offsetting entries: one entry for the amount of return of capital reported on the 1099-DIV, increasing cash, and then an offsetting entry for a negative dividend for the same amount, leaving cash unchanged.  

It seems like there's a couple of ways of doing what you need to do in Quicken.  The first way involves creating a new Category of "Realized Gain" since you don't have access to Quicken's _RlzdGain Category:

leaving you with no gain on the PUT:

The other way would be to pretend you bought the PUT back at exactly the price you received and adjust the purchase price of the underlying stock:

also leaving you with no gain on the PUT:

Tom Young

US Tax Law is the same in this area. 

A similar event is when (in the US) you receive a 1099-DIV that indicates some of the quarterly "dividends" you've received for a particular stock, and recorded in Quicken for the year, are classified on the 1099-DIV as return of capital.  This situation is easily handled in Quicken by recording year-end offsetting entries: one entry for the amount of return of capital reported on the 1099-DIV, increasing cash, and then an offsetting entry for a negative dividend for the same amount, leaving cash unchanged.  

It seems like there's a couple of ways of doing what you need to do in Quicken.  The first way involves creating a new Category of "Realized Gain" since you don't have access to Quicken's _RlzdGain Category:

leaving you with no gain on the PUT:

The other way would be to pretend you bought the PUT back at exactly the price you received and adjust the purchase price of the underlying stock:

also leaving you with no gain on the PUT:

Whirly

Thank you, Tom. I would have thought that the need for a work-around would have been fixed by now. In Canada we also need to adjust the cost when we trade the same stock twice within 30 days and one trade is a capital loss. I prefer your 2nd option because the option trade will not show as a profit then.