Entering a Stock Sale and new owner

Dennoman

I recently had one of my stocks sell to another company. They paid a cash out to me of a certain dollar amount and then also issued me new shares in their company. How do I enter this properly into Quicken?

NotACPA

We could give you more specific advice, rather than generics, if you'd name the 2 companies.

q_lurker

That is commonly called a cash-to-boot transaction. They can be complex to process depending on the users’ needs and expectations. Company specifics are required to get a meaningful response. 

Dennoman

Company XONE was sold to Company DM. There was a cash amount paid and the rest was in stock.

q_lurker

So DM acquired XONE giving 2.1416 shares of DM plus $8.50 cash for each share of XONE effective 11/12/21.  

You have to choose the fair market value of the DM shares received.  The Form 8937 does not offer any guidance in that regard.  Frequently the trading values on the next business day (11/15/21) are used.  I see those on Yahoo Finance as Open 8.55, Hi 8.60, Lo 8.01, and Close 8.02.  For my continued discussion here, I will use the Hi/Lo average = $8.305/share, but that determination is up to the investor.  You or your broker may use a different value.

With the fair market value per share, you next determine two other values as share value received and total value received.  Share value received is the $8.305 x 2.1416 shares = $17.786.  You received that amount in DM stock for each XONE share you gave up (sold).  Total value received was $8.50 more than that or $26.286.

Now, what did you pay for your XONE shares -- each lot as applicable? 

• If you paid less than the 17.786, all the cash received (8.50 per share) is to be treated as capital gains.
• If you paid more than the 26.286, you are currently in an overall loss position.  None of the cash is treated as a taxable capital gain or loss.
• If you paid something in between those values, some of the cash is taxable as a capital gain, some is not.

Now in Quicken, 

• Those shares that you bought cheaply (below 17.286/share), sell for your basis + the $8.50/share cash.  That will generate the capital gain liability you have incurred.  Buy the appropriate number of DM shares for those sold shares for the same basis as the original holding,  If you had 100 XONE shares for which you paid $1000, you would sell 100 XONE for $1850 and buy 214.16 shares of DM for $1000.
• Those shares you paid a lot for (more than 26.286), sell for the same amount as your basis.  That will dispose of those shares with no capital gain incurred. You then buy the appropriate number of DM shares for a lesser price that leaves the $8.50 per share cash in your hands.  If you had 100 XONE shares at a $3,000 basis, you would sell those shares for $3,000, then buy 214.16 shares of DM for $2,150 (= 3000 - (100 * 8.50)).
• Any XONE shares you acquired for a price between the 17.286 and the 26.286 you can sell for the 26.286/share price.  The will generate a capital gain of less than $8.50/share for you.  You can then buy the appropriate DM shares for for an amount that leaves the right amount of cash in hand.  With 100 XONE shares at a $2000 basis, you sell them for $2628.60 (yielding 628.60 in current realized cap gains).  You'd then buy 214.16 shares of DM for $2,628.60 - 850 = $1778.60.  

In you brokerage account, you will not have received the fractional shares.  You will have received cash-in-lieu (CIL) instead.  To bring things to balance in Quicken, you sell then final fraction share for that CIL amount.

All these Quicken transactions would be dated 11/12/21.

If necessary, you can take further steps to revert the acquisition dates for the just bought DM shares back to when the XONE shares had been acquired.  That would be appropriate if you are selling the DM shares before 11/12/22.   

Good Luck