How to enter Salesforce / Slack take over?

How would I enter this into Quicken, since you get cash and shares of Salesforce?


  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited July 2021
    Entering these sorts of stock plus cash transactions into Quicken can be tricky as there's no "wizard" to guide you through the needed entries.  The reason for this is because the income tax rules and regs require some very specific accounting for the transaction.  If you have multiple lots of Slack you're pretty much forced to do calculations outside of Quicken - a spreadsheet helps - and then make a series of specific entries into Quicken to get you the results you're looking for.  The tax rules here dictate:
    1.  You need to calculate your gain or loss on a lot-by-lot basis.
    2.  Your gains are calculated as: (cash + FMV of stock received as "proceeds") minus the basis of your stock.
    3.  You report the smaller of the calculated gain or the cash received as gain.
    4.  If you calculate a loss based on the cash + FMV proceeds you can't use the loss.  For a loss lot you report a $0 gain or loss.
    5.  For each lot your basis in the stock of the new company is: Basis in lot of old company tendered - cash received + gain recognized.
    6.  The holding period of the each lot tendered of the old stock carries over to the new lot received of the new stock.  
    Got all that? :D

    You can see that a spreadsheet (if you have many lots) is almost a necessity.  When you do your calculations you use the correct exchange ratio - 0.0776 - which will almost certainly create fractional shares for each lot.  That's the correct approach as the full amount of stock received for each lot - including fractions of a share - figure into that lot's "proceeds."
    You should also see at this point that the "basis" you're going to use in your income tax return might be the basis of the lot tendered, (gain calculated on cash plus FMV of stock minus basis is less than cash received), or it might be the lot's entire basis (a "loss"), or some number in between.  That is you "derive" the basis depending on the amount of the reporable gain, or if you have a loss.  (It's even more complicated than that for income tax reporting purposes as some brokers report only the cash as proceeds and some brokers report the sum of cash plus FMV of stock as proceeds.) is using $248.28 as the fair market value of the Salesforce stock received but I can't see that Salesforce has yet published a Form 8937 with their own opinion as what the "correct" number might be.  (There's no cookbook definition of fair market value in these cases so there can be different opinions.  You might want to hold off until Salesforce publishes their version.)
    Having gotten your ducks in a row my method for entering these transactions in Quicken is:
    1. Make one entry to Remove all old shares

    2. Make one entry to Add back all your old short term shares using any date that makes the new "lot" short term and using a per share cost that comes to the derived basis determined above.
    3. Make one entry to Add back all your old long term shares using any date that makes the new "lot" long term and using a per share cost that comes to the derived basis determined above.
    4. Sell your short term and long term holdings for the cash you received for each "lot'.

    At this point your cash (before cash in lieu) is properly stated in Quicken and your long term and short term gains are properly stated.                                                                   
    Now do a series of Add actions to establish each lot of "new" shares using an appropriate "acquired" date (same as date of lot tendered) and an appropriate per share cost to come to the basis you calculated for each lot.                                                                   
    Then you sell whatever fractional shares you "should have" received for the cash in lieu, recognizing a gain or loss as appropriate.                                                                    

  • Sugarhee1966
    Sugarhee1966 Member
    lucky I only have one long term lot.
    lets say I have 100 shares long term purchased at $20.00 cost basis $2000.00
    Cash proceeds would be 2679.00. gain here is 679.
    Gain would be 679 plus 1926.65 (7.76 x 248.28) is 2605.65 is the basis for the NEW lot or would it be 4605.65 (2679+1926.65) ?
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    "Cash proceeds would be 2679.00. gain here is 679. "
    It's been a while since I've typed up how to report these transactions and I screwed up because I didn't consult my purpose-built spreadsheet used to calculate the numbers in these stock plus cash deals.  I've corrected the write up so that it now reads properly. 
    You report the lesser of your true "gain" based on the value of stock plus cash received or the cash actually received.
    Based on your numbers you received $4,605.65 in value, which results if a reported gain of $2,605.65.  As this number is less than the cash received of $2,679, that $2,605.65 is the gain to be reported.
    The basis of the stock received (including the fraction of a share) is $1,926.65 which is
    $2,000.00 (original basis) - $2,679.00 (cash received) + $2,605.65 (reported gain).
    My apologies for messing up here.  I'm glad you followed up.