mutual fund conversion bug

Hello:
We have observed a small bug in the mutual fund conversion function. When the old fund is converted to the new fund, the entries for the investment amounts shown in the Security Report for the new fund are several cents different from those entered in the same report for the old fund. (Can provide copies as proof if anyone wishes.) The data in the report for the old fund matches the original information from the mutual fund annual statement. In order to provide the correct information for Federal Form 8949, one might need to correct the acquisition cost information in the Security Report for the new fund to match the original data, as in the Security Report for the old fund.

Just speculation: Perhaps the code for the conversion does not simply copy the investment amounts from the old fund. Instead, it recalculates the amounts based on the number of shares and a rounded version of the original acquisition quote.
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Comments

  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    Re your speculation -- There is some truth there, in particular, if there was a commission on the original transaction.  In such a case, the total cost including commission is divided by total shares to get a cost/share of the new holding that will be different than the cost/share of the original transaction (before commission added). 

    Something similar may occur is part of the original lot has been sold.

    Not sure what your 'several cents' difference amounts to.  Off the top, I'd expect no more than 2 to 3-cents, but that could be very dependent on the size of the holding.    
  • Howard1
    Howard1 Member ✭✭
    The original transactions had no commissions. And no part of the original lot has been sold. Also, we see that the "Use Average Cost" in the Security Details of the first fund was not checked.

    Only some of the transactions had discrepancies, from $0.01 to $0.05. It is notable that these discrepancies were all on small reinvestment transactions. For example, the $0.05 discrepancy was on a reinvestment amount of $0.66, or 7.5% of the amount. The larger amount transactions were all accurate. So it seems like there is some rounding error involved.
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