How do I convert mutual fund share classes in just some accounts?

DAGbike

I need to convert a specific mutual fund in three of my accounts to a higher level share class. When I use the mutual fund share conversion option, I get gibberish. There are over 100 entries in each of the three accounts if I do it manually (every lot purchased/reinvested over many years), so that is not an option. Using the corporate take over option, as recommended in another thread, converts all my accounts. That won't work either.

Jim_Harman

I would click on Holdings in the account then set the As of date to after the conversion but before the transfer. Click the little plus sign next to the security. Is the cost basis correct there? 

Is it correct before the conversion?

R36.48 should handle the conversion correctly.

Jim_Harman

Please describe the gibberish you are getting with a Share Class conversion.

It is supposed to remove all the old shares with One Removed transaction then create one Added transaction for the new security for each tax lot of the security you hold. If you have dozens of tax lots because of reinvestments, it is normal for there to be dozens of Added transactions.

Note that the Share Class conversion does not work properly if you have chosen the "Use average cost" option in the Security details. It grossly miscalculates the cost basis in that case.

DAGbike

Thank you for your response. My security is set at 'identify lots'. I've deleted the transactions. There was one transaction moving the old shares out. It looked appropriate. There were many moving shares back, as I expected. The cost basis for each lot moving back in was equal to the entire cost basis for all the shares that were moved out. The total cost basis for all the new shares was over $300M. That was some of the gibberish, maybe not all.

Jim_Harman

What you describe is exactly what happens if the "Use average cost" option is selected. Click on the security name or the little icon next to it to go to the Security Detail view. Click on Edit Details and make sure the Use average cost checkbox is not selected.

Are you using a current version of Quicken, Deluxe or higher? If not, there are other problems with the Share Class Conversion.

DAGbike

Thank you Jim. I checked again and see that the original security did have 'average cost' checked. I unchecked it. It's now recalculating. How do I see what version of Quicken I'm using?

DAGbike

The conversions seemed to go through successfully this time. Thank you! What problems come up with the older versions of Quicken? Mine is running on Windows on my laptop. As far as I know it is still supported by Quicken. I believe it is software on my computer that I own, if that helps. I don't know the version.

volvogirl

For version go up to Help-About.   I'm still using Quicken 2013.  This is what I did for my Vanguard accounts.

If  the number of shares and price haven't changed I would just change the name and ticker symbol.  If the shares or price changes then you should do a Corporate Acquisition.  But if  it's set up as a Single Mutual Fund you can't do a Corporate Acqusition.  

Ps56k2

DAGbike said: The conversions seemed to go through successfully this time... I don't know the Quicken version.

For version and subscription expiration date.....  --> Help --> About Quicken

And just for us following along - what mutual fund are we discussing - and what changed in the Class ?

Jim_Harman

@volvogirl, current versions of Quicken handle the Share class conversion correctly unless the security is set to Use Average Cost. If it is set to Use Average Cost, the resulting cost basis is the actual cost basis multiplied by the number of tax lots. This leads to problems like the $300 million basis that @DAGbike reports.
 
The conversion affects just the selected account. The problem with Corporate Acquisition is that it affects that security in all your accounts, which is often not what you want.

Until early 2019, the Share Class Conversion caused problems with the Investment Performance Report. See this discussion.
https://community.quicken.com/discussion/7762578/continuing-problems-with-performance-calculations-after-share-class-conversions

DAGbike

@Jim_Harman I am using Quicken Premier Version R36.48, Build 27.1.36.48. Should that handle Share Class conversion correctly?

DAGbike

@Jim_Harman It appears the shares with the upgraded class conversion are properly reflected in my accounts. But, I gifted some of the upgraded shares, using Transfer Shares To Another Account. Each time the basis is wildly exaggerated. Any advice?

Jim_Harman

I would click on Holdings in the account then set the As of date to after the conversion but before the transfer. Click the little plus sign next to the security. Is the cost basis correct there? 

Is it correct before the conversion?

R36.48 should handle the conversion correctly.

DAGbike

@Jim_Harman "Shares Transferred Between Accounts" In the donating account, the cost basis is correct before and after the transfer, checked as you describe. When I go to Specify Lots of the shares being transferred, I check Minimize Gain. The Purchase Price for the lots selected appear to be correct. The current market price for the shares selected is well above the market price, but, the Gain/Loss shows as a loss. When I go to the Securities List and view the price history of the shares being transferred, they appear normal. BTW, if I click on Maximize Gain, that gives me a loss too.

DAGbike

Sorry, the current market price is well above the cost. The cost is correct, yet it shows a loss.