doesn't download cost basis from Schwab, how to manually enter cost basis?

Budholm

I don't see/find an understandable way in Quicken to MANUALLY enter cost basis to my holdings at Schwab. I'm no "Geek", but I'm not stupid either. Come on guys and gals, that should be a part of financial software 101.
I spoke with Schwab about it and their preliminary response was, "that is an ongoing issue with Quicken...they have an issue with the way we send it to them."

Tom Young

It's not clear from your post where the problem resides.  I've been using Schwab, and Quicken, for decades, and simply have never had this this problem. 

Are you saying that if you buy a stock from Schwab and then download the transaction into Quicken that somehow the stock shows up in the Account, without basis attached?  From an "accounting 101" standpoint the balanced entry that Quicken uses for this sort of transaction is a "Buy" action where cash goes down and cost basis goes up in equal amounts and I've downloaded hundreds of those kinds of transactions over the years.

I can only guess that somehow this post, maybe, has something to do with setting up the Schwab Account in Quicken, a brokerage account that's been established for many years, and not getting the correct historical cost basis, but instead getting a bunch of placeholders?

That certainly can happen because Quicken, being an accounting program, "builds" its cost basis information from a series of historical accounting entries - buys, sells, dividend reinvestments, spin-off, split-ups, etc.-  and the financial institution, Schwab included, doesn't send to Quicken every single transaction from the time the account was established at the financial institution.  In this case you will get placeholders because Quicken will take the historical transaction record provided and if this results in a different number of shares than the FI shows that you own, the placeholder is created. 

If this is the situation you face - just a guess on my part, of course - then you need to resolve this on your own.  Frankly that quote from Schwab makes no sense, as what the FI sends to Quicken are accounting transactions coded, presumably, to the OFX format.  As far as I know there's nothing in the OFX schema along the lines of "and here's the cost basis for your holdings of Company ABC stock," a number the FI might not even know in the first place.

You resolve these problems in one of two ways. 

1. You delete the placeholder and replace that with all the missing transactions.  That results is the correct number of shares with the correct cost basis.
2. You effectively convert the placeholder into an Add action (or replace it with a bunch of Add actions) where you tell Quicken what the amount of "missing" basis should be.  If Schwab has that "total basis" figure, correctly, you can easily derive the missing piece.

If my guess as to the situation you face is wrong then you need to provide some additional detail here.

Budholm

Your resolution doesn't work, Q won't let me. It still begs the question, why doesn't Q have a simple method to manually update cost basis on the financial section if I have the numbers? These investments were purchased over a number of years at a different brokers, so they were transferred in (Acat) to Schwab. As required by the industry, they transferred the cost basis too and it is on the account at Schwab. So if, as you suggest, they are just downloading financial info, why not the cost basis too; it is all on the same spread sheet? The lack of cost basis is even a bigger issue as time goes on. I sold a couple of holdings and the figures in Q are silly, it doesn't show the correct capital gains, thank goodness Schwab does the tax reporting, not Q. So, it is obvious that something else is going on at Q to render their software useless for anything but the simplest accounts. I might add that investment lots bought at Schwab do show the correct cost basis for those lots, but that was before the Q ownership changeover.

Obviously I have portfolios at other brokers, they all download the cost basis to with the holding into Q. BUT, they have what I call "Quicken buttons". "Download to Quicken", Schwab doesn't have that. Hmm, sounds to me that the issue is with Q, not Schwab.

Jim_Harman

For Quicken to have complete and accurate cost basis information, it needs the cost of each lot you purchased, even if it was 25 years ago, and it needs the lot information from each sale so that it can tell what you have left. This data is not included in the downloads. 

If all the transactions for the Schwab account since it was opened are in Quicken and are correct, then Quicken's basis should match Schwab's.

Budholm

Tom, I thank you very much for the quick reply, and sorry I forgot that on the above. I had a much longer reply to you with the thank you, but for some reason Q didn't post it. Wonder why.

Budholm

Jim, thank you for your reply, but there is an issue with what you suggest...Q is only DOWNLOADING THE INFO that Schwab gives them into MY software for MY convenience. That is where Q's responsibility ends. Q is NOT the reporting agency, Schwab is. They don't need all that info, its useless. Other than the dupes that had also been purchased through Schwab, Q is only downloading single lots anyway. Remember, many of these investments have been transferred (Acat) in from other brokerage houses. Other brokerage houses that I deal with (that have the "Quicken button") that do download cost basis, they only download single lots with a cost basis. The other item that Q doesn't calculate capital gains, Schwab does and shows the transactions in a "report" that Q downloads. So when Q shows me capital gains, it is showing me what it got from Schwab. In that report, it shows lots and cost basis for each lot, but Q STILL doesn't show cost basis in its report even though it is there! Why not? They are getting it "straight from the horse's mouth." The buy or sell order goes to Schwab, not Q, so that is where I get my decision making info.

I am sorry Jim, but I disagree with what you say. I think/feel the real issue is the "Quicken download button". When I look at other financial institutions that are having issues with Q, do they have "Quicken buttons" or no?

Jim_Harman

There are several issues at play here.

-- When holdings are transferred between brokerages, you generally must manually enter a "Shares transferred between Accounts" in Quicken. This will enter one Removed transaction in the old account for each security, and an Added transaction in the new account for each tax lot. This preserves Quicken's cost basis info. Often the downloaded data just has one Added transaction for the entire holding and may or may not include the FI's total cost basis.

-- Quicken does not download capital gains information from brokerages. It downloads transactions and calculates capital gains based on the information it has on the cost basis of each tax lot and which lots were sold. Its calculations are only as accurate as the data it has.  When you sell shares, you must make sure that the lots sold in Quicken are the same ones you told the brokerage to sell.

If you want to see Quicken's data on the lots and cost basis, go to the account's transaction list (register) and click on Holdings. Click the plus sign next to each security and it will show the details for all the lots.

You can change the As of date and you will see the cost basis and holding details for that date. This can be very helpful in determining when the cost basis data for an account has gone awry.

Budholm

I'm sorry Jim, that makes no sense. When holdings are transferred between brokerages they use Acats (Automated Customer Account Transfer Service (ACATS)), I believe it is an industry standard. Q has nothing to do with it. If what you said is true, then why couldn't I insert (update) the cost basis? I have seen no instruction to do what you suggested in Q and it wold be absurd. Why would I need Q in the first place then? When the holdings were transferred out of the other brokerage, they were only left in historical info, they are not in the current file. In this instance, there are 40 line items (holdings) that were transferred. If that were so, then why didn't I have to do it with the other brokerages? I tried what you said about the lots and costs, there are none there only the date of transfer. Your piece about capital gains is incorrect, how could it calculate capital gains without cost basis?
When it comes down to it, it appears that Q has sold me only half the pie at full price! I suspect, and I don't know for sure, this is my opinion; that for Q to function properly for investments, the brokerage house has to "subscribe" to Q. That is the "quicken button" I have noticed. That would be the missing piece of the puzzle.

Therefore Jim, if you do anything with investments, you must be using brokerages with the magic button. Then everything you say may be true to you, but we are comparing apples and oranges.

Tom Young

"Your resolution doesn't work"

I mentioned a couple of different ways to fix things, but you didn't say what you tried. 

"Q won't let me"? 

What do you mean by that?  Do you get some error message when you either enter a missing transaction (e.g., a Buy or Sell) or as you attempt to to do an ADD action?  Do you get an error message?  Does Quicken ignore your entry?   Maybe Quicken shuts down on you?  How do you expect anyone to help you when you provide no detail, only make accusations?

"It still begs the question, why doesn't Q have a simple method to manually update cost basis on the financial section if I have the numbers?"

It does, and I told you how.  The very simplest method is one great big ADD action where you enter the number of shares that are "missing" and the cost basis for all those shares.  That will zero out the placeholder and your cost basis will match what the broker is reporting.  (That doesn't mean you have the correct cost basis.  There are lots of situations where the broker doesn't have proper cost basis for every single lot.)  One big ADD means you lose visibility to lot information - costs and holding periods - but it does exactly what you're asking for.

"As required by the industry, they transferred the cost basis too and it is on the account at Schwab."

I'll caution you that the "requirement" is only about a decade old and omits "uncovered" shares, like shares you might have inherited or shares purchased earlier than when the concept of "covered" shares was born.

"So if, as you suggest, they are just downloading financial info, why not the cost basis too; it is all on the same spread sheet?"

I didn't say the FI's download "financial info", they download actual real-world transactions (as best they can) and the FI's set the limit as to how far back in time those transactions will be available.  The are not sending Quicken a "spreadsheet", they send these transactions using a very well-defined schema so that Quicken can move this information, one item at a time, into its own data base.  There simply isn't a bucket in this schema where the FI sends "here's the cost basis for this holding, (as best we know, no guarantees it's correct, we may have lots where we don't have that information) and you (Quicken) can figure out the difference between what you calculate based on the transactions we've provided and this number."  Quite frankly I don't think the FIs would even want to have this data bucket in the OFX schema because in too many cases they just aren't in the position to "guarantee" that number.

"So, it is obvious that something else is going on at Q to render their software useless for anything but the simplest accounts."

I guarantee you that I don't have the "simplest accounts."   My investing activities span decades, my investment activity includes trades made well before "covered" securities were invented, includes multiple transfers of securities between different brokers, includes inherited shares, bankruptcies, spinoffs, stock for stock mergers, cash mergers, cash to boot mergers, stock splits, split offs, rights offerings, returns of capital, amortizations of premium and discount, ETFs organized a partnerships or grantor trusts, and probably a few other things.  Yet I have a high degree of confidence in all my numbers because I understand this: Quicken helps you do your accounting, it can't, really, do your accounting for you.  You may think this statement is hyperbolic, but it isn't.  Quicken isn't "that smart" (what can you reasonably expect from a retail-level accounting program?) and it's not at all uncommon that brokers send you the wrong transactions for a particular event. 

"Obviously I have portfolios at other brokers, they all download the cost basis to with the holding into Q. BUT, they have what I call "Quicken buttons". "Download to Quicken", Schwab doesn't have that. Hmm, sounds to me that the issue is with Q, not Schwab."

You would be wrong.  I assume that the "Quicken button" refers to logging on to an FI's website and doing a "Web-Connect" download of information. Schwab supports the Direct Connect method of downloading into Quicken, the most reliable and powerful method for downloading.  But the method of getting information into Quicken is largely irrelevant as it's the FI, not Quicken, that determines how far back transaction available for download will be maintained.  The FI, and not Quicken, also controls how Quicken can access the FI's site.  If you want a Quicken button at Schwab you'll have to talk to Schwab.

Tom Young

"I'm sorry Jim, that makes no sense.  When holdings are transferred between brokerages they use Acats (Automated Customer Account Transfer Service (ACATS)), I believe it is an industry standard. Q has nothing to do with it.

Assuming the word "that" here in your first sentence is referring to @Jim_Harman's first paragraph, he isn't talking about how brokers do transfers, he's telling you how to mimic that activity inside Quicken.  The brokers themselves might even send the correct transactions to Quicken: one REMOVE for each security in the old Account and multiple ADDs for each security in the new Account with the correct basis and holding period. But frequently they don't.

"If what you said is true, then why couldn't I insert (update) the cost basis? I have seen no instruction to do what you suggested in Q and it wold be absurd." 

If it happened that the first broker sent a proper "Remove" for the old Account and the new broker simply did one ADD with nothing in it but the security name and the number of shares, then you could edit that ADD to update the basis.  But you've never - not once - provided any detail about what you're seeing.

"this is my opinion; that for Q to function properly for investments, the brokerage house has to "subscribe" to Q. That is the "quicken button" I have noticed. That would be the missing piece of the puzzle."

I've explained above that the ability to download information via "Web Connect" is just another way of getting an OFX that Quicken can parse.  Schwab has decided, apparently, to not allow Web Connect and instead use Direct Connect. 

And I'm out.

Jim_Harman

I'm out too. @Tom Young and I have tried to explain how Quicken handles investment transactions and what you need to do to resolve your situation, but you apparently have other ideas about how it should work.

Good luck!

Budholm

Thanks to both of you, but I think you lost sight of what we were trying to accomplish. Go back and look at the original question, especially the part about not being a "geek".
Let me give you a little feedback. I am a retired person trying to take care of his finances. When I look at the investment portion of Q I get the same columns that everyone else gets, one of them is cost basis. I don't care about trade lots, transferring from another broker, when it was bought (even if it was 25 years ago), etc., let Swab deal with that. I do very little trading, but I still want to know where I stand at a glance. For that, cost basis is important.
Since Q won't download it, HOW DO I ENTER IT MANUALLY WAS/IS THE QUESTION. You guys never answered that question! One of you suggested "placeholder" entries, but to my understanding they are marked with an asterisk (*), I have zeros under cost basis with the Schwab account. When I tried that method, I got nowhere.
"I've explained above that the ability to download information via "Web Connect" is just another way of getting an OFX that Quicken can parse. Schwab has decided, apparently, to not allow Web Connect and instead use Direct Connect. " Bingo! To me, that is the missing part of the puzzle. I don't know why Schwab doesn't uses Web Connect it could be cost, security, interface with their software or the phases of the moon, I don't know and not in my control. If I am not mistaken, Web Connect is relatively new and is still full of quirks. I deal with a couple of banks, two use direct connect and no issues, the two that use Web connect are nightmares and I am about to close the accounts. Direct connect worked well before, it even downloaded cost basis then.
But i do know that apparently because Schwab won't/can't use Web Connect I have to pay the price.

THE OBVIOUS ANSWER TO "HOW DO I ENTER COST BASIS MANUALLY" IS YOU CAN'T.

Budholm

Tom, you were off topic with your last post. I don't want a "retail" level bookkeeping program to do my accounting, I am perfectly capable of doing that myself (I have a BSBA and a MBA with 24 hours of accounting six of them at the 500 level), but one day I am going to leave this life and my wife will have to do it for herself and Q is making too many changes that she wouldn't be able to adjust to.

Jim_Harman

Here is a method you can use to force Quicken's cost basis data to match your broker's data for a security, if you can't correct the original transactions.

1) Back up your Quicken file in case something goes wrong

2) Print out the broker's tax lot data for the security showing the acquisition date and cost for each tax lot. Hopefully this is a short list. Make sure you are satisfied that the broker's data is correct.

3) In Quicken, enter a Remove transaction for the total number of shares of the security in the account. Use today's date for the date of the transaction.

4) For each tax lot in the broker's list, enter an Add transaction for the number of shares in the lot. Use today's date for the transaction. Leave the price per share blank and enter the acquisition date and the total cost of the lot using the broker's data. Let Quicken calculate the cost per share.

When you are done, your total shares, total cost basis, and the details of each tax lot in Quicken should match your broker's data.

For future sales, make sure the lots you specify in Quicken match the selections you have made at the broker.

If the broker's list has dozens of tax lots, this will be understandably tedious. You can instead enter one Add transaction for the entire holding using today's date as the acquisition date and the broker's total cost basis, or two Adds, one for the long term holdings and one for the short term. This will set your total cost basis in Quicken equal to the broker's. The downside of this shortcut is that if you sell part of the holding in the future, Quicken's capital gain calculation will not match the broker's. It's up to you. 

Rocket J Squirrel

Budholm said:

THE OBVIOUS ANSWER TO "HOW DO I ENTER COST BASIS MANUALLY" IS YOU CAN'T.

The actual answer is that you can easily enter cost basis manually. You must edit all transactions which cause shares to be added to your account. These will be Buy or Add transactions. In the case of a transfer of shares, you will find Add transactions in the destination account.

You can also get Quicken to do this automatically, even at this late stage. But that's not what you asked.

Quicken Francisco

Hello everyone,

This thread has become argumentative and has been answered by multiple users as well. This thread will be closed to avoid any further argument.

Thanks,
Quicken Francisco