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Lost cost basis after Apple split

I bought Apple a while ago, but noticed today that there was no cost basis when looking at my holdings value. When I click on Apple I see two lots, one from 8/28 which appears to be the split, and a lot on 9/2 for a fraction which Schwab shows as "reorganized issue". I don't see my original purchase even though the transaction is still in the register. The number of shares on Schwab matches Quicken, however, how do I get the cost basis right?

Answers

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited September 2020
    I can only guess that a download from Schwab entered a "Remove" transaction for your original Apple shares, then an "Add" transaction for the split with no basis figure included for the Add.  They also probably downloaded a small amount of cash for the purchase of the fractional share, that 9/2 entry.  You should be able to see exactly what happened by running an Investment Transactions report, customized to that one Account and including only the Apple security.
    If that's correct then you need to delete the Schwab downloaded transaction except for the Cash in Lieu (CIL) leaving only the original purchase and the small amount of cash.  Then enter a StkSplit action on 8/31 for the split.  That should leave you with the proper number of share (probably including a fraction of a share) with the proper basis.  Then convert the transaction for the cash (CIL) to a Sold action, selling the fraction of a share.
  • That makes total sense, however, that's not what I'm seeing. When I ran the transaction report as you suggested I see an entry for 'Added' shares from the Schwab data feed, but with no cost which I guess could make sense for the split. I then see a placeholder entry on 9/4 for a negative number of shares (way more than I own), but with no cost. I presume this was to adjust the number of shares to equal what Schwab is downloading to make things match. Should I just delete the Schwab transactions and do it manually as you suggest? Thanks again!
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    " When I ran the transaction report as you suggested I see an entry for 'Added' shares from the Schwab data feed, but with no cost which I guess could make sense for the split."
    It gets the number of shares correct overall, but of course those shares also have basis.  I believe this (erroneous) entry is all that Schwab can do here since Schwab can't kick off a "StkSplit" transaction for you.  This points out the fact that you can't simply rely on downloads to keep your Accounts accurate.
    "I then see a placeholder entry on 9/4 for a negative number of shares (way more than I own), but with no cost."
    And this points out the fact that you should never accept placeholders, not if you want true accuracy in your Accounts.  Instead, you should figure out why a placeholder is being proposed, and then do whatever is necessary to get rid of that placeholder.  (I don't know why, but the only investment Accounts where I routinely get suggested placeholders are my Schwab Accounts and I've always found that the suggested placeholder is incorrect, not anything in my Accounts.)
    "Should I just delete the Schwab transactions and do it manually as you suggest?"
    Yes.  Doing so should result in a number of shares and basis for those shares that matches matches Schwab's figures, and a small gain or loss for the CIL transaction.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    First, I think you need to determine what happened to the original purchase.
    • Did it get properly recorded?  
    • Did it get recorded as a placeholder (no cost basis)?  
    • Did it get recorded properly at the time but now is not present (Restore a timely backup with a different filename to see)?  
    • Did it get recorded as purchase of a different security?  
    • Did it get recorded as a purchase in a different account?
    • For "As of" dates prior to the split, does the cost basis and holding show correctly?
    Once that transaction is properly recorded, any placeholders should be deleted.  The split should be recorded as a StkSplt transaction on 8/31/20 at a 4:1 ratio.  Any other transaction associated with the split (a Remove Shares or Add Shares) should be deleted.  

    Financial institutions too often present poorly chosen Quicken transactions in place of proper stock split transactions. 

    See this discussion for further thoughts on that split:
    https://community.quicken.com/discussion/7880103/apple-stock-split-year-to-date-returns  
  • I just ended up deleting and re-entering the split as the original seemed ok and it worked. Thanks for the guidance. Much appreciated.
  • Ps56k2
    Ps56k2 SuperUser ✭✭✭✭✭
    Once you get bitten by these ADD/REMOVE transactions, you learn to probably NOT accept them into your Register - and look to see what other transactions can be substituted to retain all your cost basis and history.... 
    I've also fudged it with mutual fund conversions, where I didn't want to loose the history.
    Quicken 2020 Deluxe - Subscription - Windows 10
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