Why, when stocks are moved from one account to another account- Cost Basis Missing

Rick Lush

I have over the past several years moved all my Rollover IRA money into Roth IRA accounts. Every time I use the "transfer stocks" tool, when they end up in the new account the cost basis resets to Zero. This makes tracking the long term performance of these stocks impossible.

Jim_Harman

Are you downloading transactions for these accounts, or are they manual?

If downloading and you enter the Shares Transferred between accounts in Quicken, you must delete any downloaded transactions that duplicate the move.

Jim_Harman

Also are you sure you are actually looking at Quicken's Cost Basis column and not some other measure - "Amount Invested" or something? 

And sometimes in real life when there is a Roth conversion like you describe, the securities are not moved "in kind" but they are sold in the traditional IRA, the cash is transferred to the Roth account, and the same or new securities are bought in the Roth account. Usually you will want the transactions in Quicken to match what actually happened. 

Assuming everything happens on the same day, the performance as measured by the Investment Performance Report will be the same regardless of whether the the securities were moved in kind or sold and bought. When performing this analysis, you must include both the old and new accounts in the selection for the report.

Rick Lush

I have not sold and then moved cash, I have just moved the stocks, and when that happens, the account they are moved to suddenly shows them as having a Zero cost basis. Let's say I bought a stock in one account for $30/share, then I move that stock to the new account when it is trading at $60/share right before I make the move, it shows a 100% gain. Suddenly in the new account, it shows a cost basis of Zero and that makes tracking the "gain" on the stock impossible. I have more than 40 stocks in this position right now.

Jim_Harman

Ok just to check, what edition (Deluxe, Premier, etc) and version of Quicken are you running? This would be at Help > About Quicken.

And to be clear, everything is manual, there is no transaction downloading for these accounts?

Go to the source account and click on Holdings and set the As of Date to the day before the transfer. Is all the data for the security you are moving, including the cost basis, correct?

Then to do the transfer you exit the Holdings view, click on Enter Transactions,  and pick Shares Transferred Between Accounts. You set the transfer date and the destination account, pick One Security, the name of the security, all shares, then Done.

This will enter one Removed transaction in the source account for all the shares of the security you are moving.

When the transfer is complete, go back to the Holdings view and set the As of date to the date of the transfer. I Is the security you transferred will no longer in the account?

I'll stop there, please confirm that this is the exact process you are using and the results you are seeing.

Jim_Harman

Also please make sure there are no Placeholders in either account that are messing things up. Go to Edit > Preferences > Investment Transactions and make sure the Show hidden transactions box is checked.

Then go to both accounts and see if there are any Placeholder transactions. These will have "Entry" in the Action column and will be have a gray background even when not selected.

Rick Lush

I'm running the premier edition and this problem has manifested itself several times over the course of 4 years, so it has happened over the course of several updated versions (I run the one step update daily and download the updates as soon as I'm notified that one is available). Here is the exact process that I have used in the past...all the stocks are moved at this point so there won't be any more in the future...when I am notified by my brokerage company (Fidelity) that the stocks are moved I go to the account that they are/were in and go to the "enter transactions" and select "shares transferred between accounts", pick the security I want to move and either the number of shares or ALL SHARES, depending on what I'm trying to do, pick the account and the transfer account, and then press enter/done or enter/new, depending on if I am done or have more securities to move. When I run the one step update the next day (sometimes it takes more than one day for the transactions to show up) I accept the "matched" transactions that show up and then carry on. The problem is that if I go to the "security detail view", it shows the transactions as "removed" from the original account and "Added" in the new account. Next to the removed shares it gives the number of shares, and for some reason the original basis price of the security, not the current value (I moved some shares of AMZN that had more than tripled in price since I bought them, but the original cost/basis showed up).The added shares in the new account show up with a ZERO basis. If I go to the "holdings" in that account or to the account in the "investments" tab, it gives a zero cost basis and the "gain" = "market value". This makes tracking the performance of the stock impossible because it looks like I paid zero dollars for it and the gain, ROI etc are wrong.

Rick Lush

Just for the heck of it I just did a "test" transaction in Quicken. I moved shares that had correct gain and ROI info from 1 account to another. When going to look at the "new" account, the gain and ROI info is correct (I have already deleted the transaction from the old and new account registers). This means that the only thing that has messed things up in the past is the "accepting" of "matched" transactions in the ONE STEP UPDATE over the past few years. If that is the case, as it appears to be, this is a "bug" that Quicken needs to fix. I'm going to try going back to a few transactions and delete them in Quicken and try redoing them and see if that fixes the issue. Not sure if I'll even be able to do this because the "old" accounts have been "closed" in quicken and I don't know if Quicken will let me do or delete transactions in closed accounts.

q_lurker

No explanation for your experience.  I just went through those initial steps and the transferred shares had their correct cost basis.  Perhaps it is something with the subsequent matching of downloaded transactions.  In my experience, brokerages do not send cost basis information with 'Added Shares' transactions.  Also, they do not always download the transfer of the specific lots, they may just download one transaction for all lots. 

I suggest you examine the Add Shares transactions in your records.  If they are truly a Quicken generated transaction, the memo line should have something like "Xfr from: (former account name)".  If that is not what the memo field shows, it may be a transaction from the brokerage rather than the Quicken-generated transaction.  Also, you can certainly enter in the correct cost basis as you examine those Add Share transactions. 

Next to the removed shares it gives the number of shares, and for some reason the original basis price of the security, not the current value

That is by design though it does become confusing from time to time and place to place.  Generally speaking, where it needs to, Quicken picks up the correct information.      

Jim_Harman

I think the problem is that you have been accepting the downloaded transactions after doing the Shares Transferred in Quicken. If the downloaded Added transaction (incorrectly!) has zero cost basis, then that is probably what will be recorded. That is why in my first response above I said you should delete any downloaded transactions associated with the transfer.

The good news is that this problem is easy to correct if there are not a lot of tax lots being transferred, as there would be for example if you had been reinvesting dividends. Look at the cost basis and acquisition date just before the transfer then edit the Added transaction and enter that information, replacing the zero that is there.