how to fix an erronous entry to stock split

Bob Zeiser

I erroneously didn't link the new entry for a reverse stock split to the existing security...the new entry should have removed the existing security and replaced it with the new security entry.... and as I result I now have two securities in my portfolio, not one.

how do I fix this?

Tom Young

Let me see if I'm following what you're saying:

1. You initiated a StkSplit transaction
2. In the window for the StkSplit transaction you entered a new security, a security not in your portfolio and NOT the name of the security that underwent the split
3. Quicken set up this new security, and you completed entering the information for the stock split

If I do exactly that I end up with a one-line transaction labeled "StkSplit" with the new security as part of the transaction, but since I had none of that security in the Account to begin with, there's no change in the "Holdings" of the Account.  The new security just doesn't show up in that window and to fix my mistake I'd simply delete that StkSplit transaction.

The fact that you are referring to a "new security" here - one that you indicate SHOULD be in the Account - suggests to me that either the old security DIDN'T undergo a stock split but maybe instead was acquired by a different company with a different name, or there WAS a stock split and simultaneous name change.

I'd advise you to disclose the name of both the old and new securities and the date of the transaction so that someone can give you some precise advice as how to proceed here.

Since you say that "I now have two securities in my portfolio", suggesting that you're seeing both securities in the Account's Holdings window, maybe my layout above ISN'T what you did?  If that's the case maybe some elucidation of the actual entry(s) that you made would also be helpful.

Bob Zeiser

When I downloaded new transactions from my Fidelity account, the stock split transaction asked me to either link it to an existing security or enter it as a new security....I should have checked the box linking it to an existing security, and I failed to do that so it entered the stock split as a new security with no value...hope that helps

q_lurker

How about sharing what the company is.  As Tom Young indicates, there are cases where the structure of a reverse split is truly creation of a new security with a new CUSIP, maybe a 'new' name; the ticker may or may not actually change.  But even in those cases, within your Quicken file, you may choose to minimize those changes.  You might choose to keep the same security name, change the ticker (if applicable), and transition to the new CUSIP.  Your post suggests Fidelity may be treating this as a new security.  But what do YOU want to do?  

Bob Zeiser

the company is GlaxoSmithKline (GSK)...shares were sold in exchange for shares in a new SmithKline security with a different stock market symbol...
I'm wondering if I can just delete the transactions from the security's Quicken account register and re-download

Tom Young

"I'm wondering if I can just delete the transactions from the security's Quicken account register and re-download "

If you re-load a backup from before the transactions downloaded then you could do that.  But simply deleting the transactions and downloading again will not result in those transactions being downloaded again.

You need to go to page 86 of the circular here

https://www.gsk.com/media/9244/demerger-agreement.pdf

and start reading at the 3rd paragraph on that page, the paragraph that starts "Assuming that the Demerger qualifies for tax-free treatment..

There were two transaction that occurred here: a spin-off of a new-to-you security - Haleon plc - followed by a reverse split.  There was no "sale" event that occurred here and you should have ended up with both the "old" and "new" security in your Account.

If you do have a backup made the day before the transactions associated with the two corporate events occurred then that might be the easiest approach, particularly if you have several lots of GSK.  The downloads will occur again, presumably.  Having read the relevant pagers of the demerger you should now be able to understand what the downloads are all about and make the correct choices.  Essentially there should be two sets of transactions downloaded to you: one set for the spin off of Haleon and then another set for the reverse split.

Ordinarily I'd not accept any downloads with respect to these two events but instead wait until I had all the information needed - most importantly the market values of Haleon and GSK immediately after the spin off - and then do a "Corporate Securities Spin-off" for the Haleon event, followed by a reverse "Stock Split" for the GSK event.  These will result in the correct number of shares (including fractional shares) and correct basis allocation.

q_lurker

I believe @Tom Young is leading you the right direction.  I would offer that I do not generally trust the transactions downloaded from a brokerage to provide what I want in my Quicken records.  Thus I would be focusing on what the correct real world transactions are and entering them through Quicken. 

In particular, I'd be trying to use the Corporate Spinoff action within Quicken to get the right cost basis transferred from each lot of GSK to each lot of HLN.  Adjustments might be necessary to the Quicken generated transactions.  Then I would address the reverse split of the GSK shares (4-for-5).     

Bob Zeiser

Thanks for your guidance

q_lurker

The approach I have taken.  My brokerage recorded these real world transactions on 7/22/22 at which point they reflected the cost basis transfer from GSK to HLN.  I chose to match their data.  (The following specific numbers reflect my values scaled to a 100 share lot.)

I had 100 shares GSK in one lot with a basis of $4,336.70.

My brokerage reported the post-event basis values as 80 shares of GSK at $3,554.27 and 100 shares of HLN at $782.43 (total still being $4,336.70).

I took note from other sources of the closing prices of GSK and HLN on 7/22 as $42.29 and $7.41 per share respectively.  

I determined that the GSK price ($42.29) was after the 4:5 reverse split and after the HLN spinoff.

I entered a Stock Split action for 7/22 for GSK as a 4 for 5 split.  This changed the share count from 100 to 80.

I entered a Corporate Spinoff action using the $42.29 and $7.41 but as a 5-for-4 (1.25) share ratio.  That way my HLN holding became the correct 100 shares.


That action generated three transactions in my account transaction list:


Note that the $779.18 multiple places is close to my broker's 782.43.  Reassuring that my independent numbers are close to theirs.  They and their source had effectively used slightly different fair market values than my 42.29 and 7.41 values.  I'll just need to edit some transactions to come to agreement.  First the Add Shares Transaction
  
Upon changing the Total cost, Quicken offer to adjust the Price Paid accordingly.  If I had multiple lots, I would note the total basis from the brokerage was 1.00417 times higher than the Quicken generated value (782.43 / 779.18) and increase the Add Share basis value accordingly for each lot. 

Before moving to the RtrnCapX transaction edit, I looked at the Investment performance report.
Here, I note the "Investments" value associated with the Shares Added as $741.00.  That is from the 100 shares at the closing price of $7.41/share.  While I entered that price in the Spinoff action, if that price ever gets changed in the price history records for HLN, the price-history value is what is used here.  Since I used the closing price for that date, this should not be an issue for me.  YMMV.

Here I also see that the MiscIncX transaction value ($38.18) is used to bring balance between the RtrnCapX transaction ($779.18) and the Added Shares value ($741.00).  I intend to delete that (screwball) MiscIncX transaction, so I'll need to edit the appropriate part of the RtrnCapX transaction to bring that to $741.00.

Edit the RtrnCapX transaction to reflect the correct cost basis adjustment (782.43) and the associated Market Value ($741.00).
   

Now I delete the MiscIncX transaction.  After these adjustments, I have transaction entries as a Stock split, a Return of Capital, and a Shares Added. 

 
Cost basis before and after is consistent, the investment performance report is in balance (no impact of the 7/22 transactions).  Everything looks good.

I will add here that price history information for GSK can get buggered up for a few days before this event.  It is harder to detect in this case because the Reverse Split was intended to balance with the spinoff.  In other split events, it is something to watch for.  In this case, I only see a 2.8% discrepancy. 

Tom Young

I haven't liked the changed approach Quicken devised for spin-offs. 

If I had owned only 1 lot 0f GSK in this situation and the broker's site showed post spin-off bases for the two stocks I probably would make entries of:

1. Remove the GSK stock
   
2. Add the GSK stock using the reduced number of shares, reduced basis, and original acquisition date
   
3. Add the Haleon at the correct number of shares, basis and same acquisition date date as GSK.

Three simple entries.

Bob Zeiser

Thank you both for your detailed approaches to this fix....very helpful

Darrel

I am having the same issue as Bob but with TD Ameritrade. I much prefer your approach Tom but what effect does that have on dividends received

q_lurker

FWIW: The method suggested by @Tom Young will not yield the correct Average Annual Return values (portfolio views and Investment Performance Reports).  This is because of the manner Quicken currently calculates those values.  I have used that method in the past successfully, but later changes to the calculation r3endered that process (Remove / Add / Add) inaccurate.  I believe the picture below substantiates that conclusion. 

Note I have set up the report for a 1-year period starting when the shares were first bought.  The Brokerage account value is then easily confirmed as = 4106.90/4336.70 - 1 = -0.053.  The problem is that Quicken now computes the Removed Return value and the Added Investment value as end-of-day share value.  The 7/22/22 transactions should cancel each other out as seen in the Brokerage account (741.00 values).  In the Brokerage 2 account, the values are out of balance.  

The problem is more skewed when the 4:5 reverse split does not occur.  Had that been the case (in the normal case), the Remove and Add of the parent company will be for the same share count, use the same end of day share price and present balancing Return and Investment values.  The Add for the spinoff has no balancing value and there is an incorrect net Investment on the day of the spinoff. 

If Average Annual Return is not important to the user, I know of no other problems with that method.    

q_lurker

Darrel said:

I am having the same issue as Bob but with TD Ameritrade. I much prefer your approach Tom but what effect does that have on dividends received

@Darrel
Did not mean to leave your question hanging.  Neither method should have any impact on dividends received.  Is there some suspicion you had in that regard that I might be overlooking?

Darrel

No. Just curios. Apparently this is a big issue with support. Have waited 5 days but they still haven't figured a fix. Tried your resolution but it didn't work for me. Appreciate your response!