Section 305(C) dividend: how to record this in Quicken

102Jim
102Jim Member ✭✭
edited March 25 in Investing (Windows)
I received a dividend from one of my Fidelity mutual funds that is classified as a 305(c) dividend and the amount is added to the basis of my fund. I don't see any way in Quicken to add to the current basis of the shares without actually buying shares and it won't let me buy zero shares. Seems like this is almost a reverse "return of capital". Is there a way to do this without going back and changing the original purchase cost?

Best Answers

  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    Answer ✓
    If you want to increase the cost basis, you may enter an negative amount on the return of capital.
  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    Answer ✓
    Hi @102Jim

    Disclaimer - I have not had one of these transactions, although I am familiar with the concept.

    I agree that the effect of the transaction is that the cost basis is increased with the number of shares not changing.  You can actually make a "return of capital" transaction in Quicken BUT enter the amount (the 305(c) dividend amount) as a negative number, which will increase your cost basis, but leave the number of shares as it is.  I think this will accomplish what you want to do.

    Let me know your thoughts and/or how that goes.

    Frankx

                            Quicken Home, Business & Rental Property - Windows 10-Home Version

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Answers

  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    Answer ✓
    If you want to increase the cost basis, you may enter an negative amount on the return of capital.
  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    Answer ✓
    Hi @102Jim

    Disclaimer - I have not had one of these transactions, although I am familiar with the concept.

    I agree that the effect of the transaction is that the cost basis is increased with the number of shares not changing.  You can actually make a "return of capital" transaction in Quicken BUT enter the amount (the 305(c) dividend amount) as a negative number, which will increase your cost basis, but leave the number of shares as it is.  I think this will accomplish what you want to do.

    Let me know your thoughts and/or how that goes.

    Frankx

                            Quicken Home, Business & Rental Property - Windows 10-Home Version

                                             - - - - Quicken User since 1984 - - - 
      -  If you find this reply helpful, please click "Helpful" (below), so others will know! Thank you.  -

  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    Really?  A reinvested dividend transaction ALWAYS changes the cost basis.

                            Quicken Home, Business & Rental Property - Windows 10-Home Version

                                             - - - - Quicken User since 1984 - - - 
      -  If you find this reply helpful, please click "Helpful" (below), so others will know! Thank you.  -

  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    edited February 16
    Frankx said:
    Really?  A reinvested dividend transaction ALWAYS changes the cost basis.
    Really.  A reinvested dividend transaction not the same as a dividend transaction.

    I already deleted my response to your post because I misread it as suggesting a negative dividend instead of the negative return of capital I had posted 12 minutes earlier.
  • 102Jim
    102Jim Member ✭✭
    Didn't realize that you could enter a negative number with a ROC. So I entered the dividend, then entered the negative ROC. The two entries cancel each other out from a cash on hand basis yet I still register a dividend for tax reporting and the basis in my mutual fund went up, so everything seems to have worked out fine. Thanks for your help.
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