'Added' actions downloaded from American Century Investments

jvprice6

When I do an "exchange" transaction at American Century Investments, the newly acquired MF shares are are shown as an 'added' transaction. Since there was no cash involved that seems okay. But, I wonder if it affects the accuracy of some report. Should I try to recode these actions, and what is more correct?

Frankx

Hi @jvprice6

From you most recent post, it seems as though you may not be correctly entering these transactions into Quicken.  Moving investment funds from one mutual fund to another mutual fund (whether or no the funds are in the same "fund family") is actually the sale of one holding and the purchase of another fund.  As you note, these are "reported to the IRS", because they are taxable transactions.

Unless they are being recorded in Quicken as sales and purchases (i.e. - if they are recorded as "removed" and "added" shares, they will not be properly reflected in your accounts and the related reports.

Let me know if you have any followups.

Frankx

Tom Young

"American Century Investments site allows an owner to 'exchange' from one fund to another. i.e. Sell some shares from an equity fund and use proceeds to buy bond fund. No cash is generated. If the sell of the equity fund generates a gain or loss, it reported to the IRS. "

That's definitely a Sell followed by a Buy.  Delete those Remove actions and create Sells.  Remove those Add actions and create Buys.

Jim_Harman

Usually it should be Sold and Bought unless it is a tax free share class conversion.

Tom Young

If you used the "Mutual Fund Conversion" action - there's no explicit "exchange" action in Quicken - then the Remove action followed by the Added actions is exactly what you should see.  The bases and acquisition dates of the new fund should carry over from the old fund.

Accuracy of reports should generally be OK as long as you remember that this exchange took place and include/exclude the securities in the reports accordingly. 

jvprice6

American Century Investments site allows an owner to 'exchange' from one fund to another. i.e. Sell some shares from an equity fund and use proceeds to buy bond fund. No cash is generated. If the sell of the equity fund generates a gain or loss, it reported to the IRS. When I download transactions, the sell is coded as a 'remove' action with an appropriate memo that there was an exchange to bond fund. I generally change edit this action to be 'soldx'. The acquisition of the new bond fund shares is coded as an 'added'. It seems that is okay. However, I have seen in at least one report; "Investment Income" where I saw these 'added' actions in the uncategorized section. Well, since the added share transactions are not yet income - I just left them alone. The problem is not with Quicken, obviously. I wish AmCent would change their methods of reporting transactions in downloads

Frankx

Hi @jvprice6

From you most recent post, it seems as though you may not be correctly entering these transactions into Quicken.  Moving investment funds from one mutual fund to another mutual fund (whether or no the funds are in the same "fund family") is actually the sale of one holding and the purchase of another fund.  As you note, these are "reported to the IRS", because they are taxable transactions.

Unless they are being recorded in Quicken as sales and purchases (i.e. - if they are recorded as "removed" and "added" shares, they will not be properly reflected in your accounts and the related reports.

Let me know if you have any followups.

Frankx

Tom Young

"American Century Investments site allows an owner to 'exchange' from one fund to another. i.e. Sell some shares from an equity fund and use proceeds to buy bond fund. No cash is generated. If the sell of the equity fund generates a gain or loss, it reported to the IRS. "

That's definitely a Sell followed by a Buy.  Delete those Remove actions and create Sells.  Remove those Add actions and create Buys.

q_lurker

FWIW; Since the same dollar amount applies to both the sale and the purchase, I would use Sold and Bought rather than SoldX and BoughtX. 

jvprice6

The rather peculiar thing is that: at American Century each mutual fund is a stand alone account. Unlike say Schwab, where there is only one account that contains all kinds of investments, i.e. stock, bond, mutual fund, etc. So there is no cash account associated with a mutual fund account at American Century. It makes it difficult for me to keep Quicken in sync. The funny thing is I do have 3 mutual funds where in the original Quicken setup, they were setup with a cash account. Although, there really is no such cash. But more recent Mutual Fund setups so not have the same setup with a cash account showing in the journal. I can handle either way, but I sure wish I could figure out how to make them consistent.

q_lurker

That American Century requires the one-fund one-account relationship is helpful information.  Setups don't have to be quite so restrictive, though. 

What they are then asking for is Account-EquityFund and Account-BondFund.  Their expectation is that these would both be Single Mutual Fund (SMF) accounts which can only hold one fund and can have no cash balance.  In this case, you would then SoldX equity shares from the EquityFund with the cash proceeds going to the BondFund Account.  In that account, the transaction would automatically appear as a BoughtX and you would just need to make sure the bought shares count was accurate.  Point being, they should still be Sold and Bought transactions, not Remove and Add.

But I will offer that even with the one-fund one-account restriction, those accounts do not have to be SMF accounts.  If you have been satisfactorily working with American Century and that account setup, I don;t think it necessary to change.