"Shares Transferred Between Accounts" posting incorrect basis

cobbonthecorn

When I use "Shares Transferred Between Accounts" the debit of the "from" account and the credit in the "to" account are different in about half the transaction. This leads to incorrect tax reporting. My sample size was moving 29 equities, some were portions of the equity shares in the account and others moves of all of the particular equity's shares. There is no correlation of portion moved, date, etc to the misreporting. A specific example: 31 shares of XYZ was transferred from account A to account B. Account A was debited $4782.32, in turn account B was credited $4184.17. The debit and credit should equal. Know error or new?

q_lurker

Where are you getting those dollar figures?

Tom Young

When you use "Shares Transferred Between Accounts" shares and the cost basis of those shares are removed in the "From" Account and put into the "To" Account, on a lot by lot basis.  The only "dollars" that move between the Accounts are the securities' cost basis.  Are those dollar amount you're reporting the cost basis dollars, or the market value you see before and after the movement? 

The market value is a calculated number and could change based on different quotes between the two Accounts.

cobbonthecorn

Correct, the cost basis is now different in the two accounts.

cobbonthecorn

The ledger from-to records....

Tom Young

I'll admit that I have not seen this before.  Can you edit the Add to square things away?

I'd try validating the file since that's an unexpected result.

q_lurker

Recognizing your comment about lack of correlation, is that specific Waste Management example a security you transferred all or a portion of?

Which cost basis value do you believe is correct (in this case)?

Do you have a history of trading in and out of Waste Management over time?  

This (WM) holding was apparently a one-lot (of 31 shares) transfer.  How does the acquisition date of the lot removed compare to the acquisition date of the lot added?    

Mostly just looking for clues at this point.  I agree, have not seen this behavior before.

With the validation step, be sure to include the rebuild lots option.  After doing that, you might try the transfer again, for one or two specific securities.  

cobbonthecorn

TY- Yes I can correct the entries but only if the basis of the "from" account is correct. I don't plan to try and unravel the basis if it is incorrectly calculated. 29 equities with complex buy/sell histories. arghhh!!!

q_l- I have gone back over enough of the transfers to determine that if all of the shares are transferred things are good, if the number shares transferred come from one lot the basis is the same between accounts, but if more than one lot is involved the from-to basis does not match. The first thing I did was delete all transactions, validate the file, lots and prices, and then transfer each again. Same result.

cobbonthecorn

FYI- I just created a new file with two accounts, 3 equities each with two trades. I then tried transferring all, a portion of shares smaller than what is in the first lot, and a portion of shares larger than the first lot. All three cases resulted in the same basis in the "from" and "to" accounts. Arghh!!!!!

q_lurker

... if all of the shares are transferred things are good,
if the number shares transferred come from one lot the basis is the same between accounts,
but if more than one lot is involved the from-to basis does not match. 

Your WM example doesn't seem to fit that synopsis.  If more than one lot is involved, there should be more than one Add Shares involved (but still only one Remove Shares).

It occurred to me that once entered as a Shares Transferred action, the two sides drop connectivity.  That is, if you later come back and edit original transactions, or change the specification of the shares removed (from FIFO to min or max gain for example), those edits can alter the Remove Shares presentation of removed basis, but will not alter the Add Shares transactions.  Your redo efforts suggests that is not the case, but maybe that idea will spur some further thought from you.  

cobbonthecorn

Good catch. I'm a bit cross-eyed at this point. Since my last response I remembered that I performed a similar exercise a couple of weeks ago. About 7-9 equities. Using one equity as an example there were two lots. All shares were transferred. The basis recorded in the parent account matched the sum of the two lots. Good so far. However, I didn't notice but in this case NO basis was recorded in the receiving account. The same was true for all of the transfers.

I want to thank all of you for your inputs. I plan to write this off as a serious but unexplainable error. I will add this to the never fixed issue with the incorrect values reported in net worth summary, and will not use any tax inform calculated since the basis of equities has been corrupted. Again, thank you for your considerations.