Mutual Fund shares changed from one class to a new class - how do I manage the transaction?

Jim Stickler

TRowe changed my account from a regular account to an Iclass account. The ticker changed and the price/share changed.
This is a non-tax transfer.
I already have the regular account set up in Quicken with history of transactions, how do I transfer to the new account?
Must I set up a new account, or can I do this all within the current account?
Thanks for your help.

q_lurker

It would generally be preferable to not have it as a 'new' account.  But it appears that TRP requires a one fund / one account relationship; something known in Quicken as a Single Mutual Fund account.  

I think you are on the right track for (IMO) the best approach.  I would:

• Create a good backup file - just in case!
• Edit the existing account details to show that the current account is NOT a SMF account.
• Create the new fund in Quicken.  Ctrl-Y for the Security list, Add Security, ticker and fund name.
• Enter Transactions button - Mutual Fund Conversion selection.  Specify new fund, number of shares, and proper price for new fund on date of conversion.
• Now you can disconnect the account from TRP Online and then re-connect it to their new fund account. 

Although you now have two funds and a cash balance column, I believe TRP will be satisfied that they can relate to this account.  I don't know what they will download the first time to populate the account.  You will likely have to delete transactions they download since your conversion should have fully populated the shares in the new fund.      
  

Jim Stickler

Ok, this seems to work:
1. Use the "Remove shares" transaction to remove the old shares of the original investement, note this does not create a taxable transaction or create a cash balance.
2. Use the "Add" shares transaction to add the new shares of the new class of mutual fund shares. This transaction asks for quantity and price. You will have to add the Ticker of the new investment, but it seemed to work.

Cash balance was not effected and a taxable transaction was not created.

Jim_Harman

Select the account and click on Enter Transactions. In the Enter Transaction dropdown, select Mutual Fund Conversion. This will create one Removed transaction for the old security and one Added for each tax lot of the new security. This may take some time if you have a lot of tax lots, from reinvested dividends for example, so be patient.

Note that this option is not available if your account is set up as a "Single Mutual Fund" account, thus @q_lurker's instruction to turn off this selection in the account details.

Also due to a bug in Quicken, the Mutual Fund Conversion does not compute the new cost basis correctly if you have the "Use average cost" option selected for the old fund.

Be sure to back up your data file before performing the conversion, in case the result is not what you expected.

NotACPA

The answer to your question depends upon which version of Q you're running.

Please do HELP, About Quicken and tell us the Product name and BUILD shown there.

Jim Stickler

I am running Quicken Premier
Build: 27.1.30.14

Jim Stickler

So after some investigation, I thought that I could use the Remove Shares transaction from the original account.
Then I could change the account details to the new account number and the new Ticker Id.
Then I would use the Add shares transaction to add the shares back to the account in the new quantity.
My concern is that the Add Shares transaction does not allow me to specifiy a value per share.
Am I on the right track?

q_lurker

It would generally be preferable to not have it as a 'new' account.  But it appears that TRP requires a one fund / one account relationship; something known in Quicken as a Single Mutual Fund account.  

I think you are on the right track for (IMO) the best approach.  I would:

• Create a good backup file - just in case!
• Edit the existing account details to show that the current account is NOT a SMF account.
• Create the new fund in Quicken.  Ctrl-Y for the Security list, Add Security, ticker and fund name.
• Enter Transactions button - Mutual Fund Conversion selection.  Specify new fund, number of shares, and proper price for new fund on date of conversion.
• Now you can disconnect the account from TRP Online and then re-connect it to their new fund account. 

Although you now have two funds and a cash balance column, I believe TRP will be satisfied that they can relate to this account.  I don't know what they will download the first time to populate the account.  You will likely have to delete transactions they download since your conversion should have fully populated the shares in the new fund.      
  

Jim Stickler

Ok, this seems to work:
1. Use the "Remove shares" transaction to remove the old shares of the original investement, note this does not create a taxable transaction or create a cash balance.
2. Use the "Add" shares transaction to add the new shares of the new class of mutual fund shares. This transaction asks for quantity and price. You will have to add the Ticker of the new investment, but it seemed to work.

Cash balance was not effected and a taxable transaction was not created.

Tom Young

@Jim Stickler

What you've done certainly does work and the only drawback to it is that it's a manual effort and one that can take a lot of work and a lot of time if you're attempting to duplicate a large "lot" structure with proper purchase prices and proper acquired dates. 

The "conversion wizard" - assuming it works properly - should do basically what you've described for you with multiple "Adds", one for each old lot.

Jim Stickler

Tom Young, where do I find the “conversion wizard”?

Jim_Harman

Select the account and click on Enter Transactions. In the Enter Transaction dropdown, select Mutual Fund Conversion. This will create one Removed transaction for the old security and one Added for each tax lot of the new security. This may take some time if you have a lot of tax lots, from reinvested dividends for example, so be patient.

Note that this option is not available if your account is set up as a "Single Mutual Fund" account, thus @q_lurker's instruction to turn off this selection in the account details.

Also due to a bug in Quicken, the Mutual Fund Conversion does not compute the new cost basis correctly if you have the "Use average cost" option selected for the old fund.

Be sure to back up your data file before performing the conversion, in case the result is not what you expected.

Jim Stickler

I used this suggestion and it worked as designed. Thanks for your help. Especially the backup recommendation!!

Alcors3

at one time it was recommended to use a Corporate Acquisition transaction to do the non-tax conversion from one share class to another. I recall the rationale was that this maintained the tax basis for all lots.