Validation error message in 401k incorrectly categorized as "Realized Gain"

I just received the following error in a 401(k) Tax Deferred Account. This is from downloaded transactions from Vanguard account where Vanguard serves as a record-keeping fiduciary *only*. The Security is a proprietary, non-Vanguard one that CVS "cooks-up" to which Vanguard assigns its own trading symbol (VGI007607)"remov. Transactions are done in "pairs' where one is the "Employee Contribution", and one is "Employer Matching". The transactions are generated by Vanguard's Robo-balancing App.

The Validation message is:

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Corrected 1 Bought or Shares Added transaction that was incorrectly categorized as a realized gain.
If any of these should have been for a Cover Short Sale, you should modify them. Listed:

Date Type Account Security Amount
1 8/4/2021 Bought Vanguard CVS Diversified Bond Fund -$5,143.13

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Actually two "Sold" transactions were done that day from the one fund that were cashed in to do this (an "Employee Contribution" and "Employer Matching" for each.


The actual buys for the day were;

8/4/2021 Bought Vanguard CVS Diversified Bond Fund -$5,143.13 (152.85 sh @ 33.648...) "Employee Contribution"

8/4/2021 Bought Vanguard CVS Diversified Bond Fund -$1,97.812 (38.57 sh @ 33.648...) "Employer Matching" --- this one did not throw the error.

There were also 2 other "pairs" of Buys (4 transactions) that did not throw errors. (In all, 3 "pairs" of Buys for a total of 6 transactions.

Nowhere did i see anything about "Realized Gains" in the Investment Register itself.

However, in an "Investment Transaction Report", there were two similar trades on 2/2/2021 and 5/2/2021, but not done with the Robo-trade. They were not "paired" and the Cash Source indicated "Unknown Source" instead of "Employee Contribution" and "Employer Matching".

Current system - Windows 10 ver. 10.0.19043.1237 (21H1) and Quicken R35.31 Build 27.1.35.31

Any thoughts of the significance of this (if any), and how do get rid of this message? (I have run Validation several times and the error remains.)

My thanks in advance...
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Answers

  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    My guess would be that the error message is bogus and that the underlying problem, if any, has been fixed.

    To make the message go away, you might back up your data file just in case, then try deleting and re-entering the $5,143.13 transaction.

    Do the 2/2/21 and 5/2/21 trades match trades for the same amounts on your statement? If not, you might want to delete them and replace them with corrected transactions.
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  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    Any thoughts of the significance of this (if any), and how do get rid of this message? (I have run Validation several times and the error remains.)
    I do not think there is any real significance.  I have seen that message a few times from my file over the years.  I have seen reports in this community a few times as well.  For me, it has not been recurring as your experience seems to be. 
    Nowhere did i see anything about "Realized Gains" in the Investment Register itself.
    I would not expect you to.  For any "Sold"-type transaction, there is not anything in the investment register that states "Realized gains".  If you dig to edit the specific lots of a Sold transaction, you can get to a Gain/Loss value, but not within the register.  Where I would expect to see evidence of realized gain would be in a capital gains report which would have to be customized to include this 401k retirement account (since such accounts are not subject to capital gains taxes, they are by default excluded from that type of report).  

    Where I wonder about the message is that it gets reported on a Buy transaction.  That would not normally make sense.  The only circumstance where a "Buy" might cause a realized gain would be if the buy was covering a short position.  In Quicken, that real world pairing should be represented by a ShtSell / CvrShort pairing.  Perhaps that is what the validation (thinks it) is detecting - a short position being covered by a buy.     


  • rcaruso
    rcaruso Member ✭✭
    I have the same issue of a buy showing up as an uncategorized realized gain except my income and expense comparison has the realized gain remaining after validation says it was fixed?

    Here is the message in Quicken

    "Corrected 1 Bought or Shares Added transaction that was incorrectly categorized as a realized gain.
    If any of these should have been for a Cover Short Sale, you should modify them. Listed:"

    This error was suppose to have been fixed in a previous update. I am currently running R36.23

    I have not been able to fix the issue. I have deleted and reentered the entry twice with no luck.

    Any thoughts?