How do you change the adjusted cost base (ACB) of a stock?

rsgell
rsgell Member ✭✭
edited June 2022 in Investing (Windows)
For tax purposes, a REIT I own did a notional distribution which impacts the ACB. Could not see how to increase the ACB directly. I'm using Quicken for Windows. I thought the following might work:
(1) Buy - for 1 share at the value of the increase for the ACB;
(2) Adjust share balance (i.e. remove the 1 share from step 1)
(3) Add the value back using Income.
Any thoughts or suggestions greatly appreciated.
Thanks Rick

Comments

  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    I'd suggest using a RtrnCap transaction.  Whereas normally those are positive values reducing the basis, you can enter a negative value that increases the cost basis.  The negative value is only accepted by either an in-register entry or an Enter Transactions entry (I forget which one works - one does, the other doesn't). 

    The amount entered will be spread across all lots owned as a uniform per-share amount.

    You can also do a more simple Remove Shares (all or one lot, or however you chose) followed by an Add Shares adding back in that number of shares with the corrected (adjusted) cost basis and the proper acquisition dates.  Post back if you have a lot of lots for this holding and want to go this route.  
  • @q_luker - it is the in-register entry that doesn't work.  I am very intrigued by the "Add/Remove shares" method of cost adjustment.  It does sound like an easier way.  I will wait to hear back if @rsgell goes that route.
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited May 2022
    For whatever reason a negative return of capital ("notional distribution") didn't work for me using either the transaction list (register) or the Enter Transaction method.  Maybe it's a bug in my version of Quicken.
    The use of Adds and Removes to correct the basis of securities requires, first, a calculation outside of Quicken, on a lot-by-lot basis, of what each lot's "correct basis" should be.  I don't know how a notional distribution is allocated to existing lots; it could be based on the number of shares in each lot,
    (# of shares in "this" lot) divided by (total number of shares owned)
    or it could be calculated based on each lot's basis,
    ($ basis of "this" lot) divided by (total $ basis of all lots.)
    Having this information at hand you could then do a Remove of all shares and an Add for each old lot with its new basis, or do a Remove of one lot, then an Add of that lot with it's new basis, repeated by individual lot Removes and Adds until you're done.
    Certainly this is easily doable if you have just a handful of lots, and your "outside work" confirms its accuracy.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    @Tom Young
    Four permutations of RtrnCap entries Quicken R37.67
    1 (positive) and 2 (negative) as register in-line entries yield the same result; negative sign is ignored
    3 (positive) and 4 negative) via Enter Transactions button yield opposite results.

    (Screenshot is from an Investment Transaction report with Cash and Amount Invested columns shown.) 
  • rsgell
    rsgell Member ✭✭
    All, thanks for your suggestions, greatly appreciated. I decided to go the RtrnCap route along with a Inc transaction to replace the funds in the account. All worked well.

    I did try my suggestion but I created a pending transaction in the process. Must have missed something along the way. Anyhow, I believe the RtrnCap is the way to go.

    Thanks again.
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