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Can you edit the cost basis of a fractional Sold transaction resulting from a reverse split?

Grimacing

I was reviewing the GE 8:1 reverse stock split which occurred 8/2021. I used the Stock Split function for the transaction which resulted in the appropriate number of whole shares plus a fraction. I sold the fractional share for a price that gave me same Cash in lieu amount as recorded on the brokers' statement. The fractional share Sold transaction resulted in a single long-term capital gain transaction from a Stock Buy from 2008. However, the cost basis for this transaction as calculated by Quicken differs from the cost basis amount recorded on my broker statement for the fractional share sale, which then results in differing total cost basis amounts between that shown in Portfolio view (for all shares) and that shown on the broker statement. I was trying to change the cost basis of that single fractional share Sold transaction but could not find a way.

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Frankx

Hi @Grimacing

If you open the register for the brokerage account (that held the stock at th time of the reverse split) and then click on that reverse split transaction, you should see an “Edit” button on the far right. You need to click on that button to make the edit to the transaction.

Let me know if you have any followups.

Frankx

q_lurker

You need to edit the Sold action that disposed of the fractional sale. There you can Specify Lots to identify which lot the fractional shares came from that yielded the cash-in-lieu. To do that, you need to know which ones the brokerage used. If you can see the tax lot info of the holding on their site, you should be able to make the correct determination.

Grimacing

Thanks for the response. The brokers statement only notes first in/first out for the fractional sale lot. In Quicken, the Sold transaction relates to the first lot of GE stock ever purchased and gives a cost basis of over $60 for the fractional share sale, which is about 0.25 of a share. By extrapolation it therefore seems like Quicken must think I paid about $240 per share when originally purchased, and there's no way I paid that.

q_lurker

Do some digging —

Go to a portfolio view (Ctrl-U) that includes Cost basis
Customize as desired - maybe only this security and this account
Choose Group by: Account
Click the + next to GE to see all the individual lots.

Now you should be able to trace the cost basis of that first lot or any lot through time by changing the as of date (You'll need to click the + with each date change.) Before and after the reverse split, the basis of the lot should not change.

Hopefully through this exercise you'll be able to see why Quicken is getting its value and compare that at some level to the broker's data

Grimacing

Thanks again q_lurker. The brokerage lists all the transactions for the GE stock including purchases from the beginning. The cost basis they have for each of the lots purchased is quite different from what I have recorded in Quicken. For example, the cost basis on the brokerage website is about $760 less for the first lot purchased than what the actual cost was at the time, which is recorded in Quicken. Their cost basis is obviously what they used to compute the cost basis of fractional share sold, but don't know how they arrived at their cost basis number.

Jim_Harman

You say the cost basis for your first lot is different by $760. Do the number of shares purchased and the price per share agree between Quicken and your broker? If not, which is correct? Of course the current total cost basis for that lot could be different if you sold part of it at some point

q_lurker

In your Quicken records, did you account for the 2015 Synchrony split-off and the 2019 Wabtec spin-off? The Wabtec in particular would have reduced the cost basis of all lots held at that time. The spli-off, I'd have to research a bit more.

Edit / Correction. The Wabtec spin-off was taxable and thus did NOT alter the GE cost basis.

Grimacing

Hi, nothing for Synchrony as it was an offer to exchange shares of GE stock for shares of Synchrony which I didn't participate in. For Wabtec, I used the Bought and Sold actions on 2/25/2019, buying and selling WAB at 73.96 and 72.26 respectively. The Sold action was only for the fractional WAB share I received. The number of shares of GE and total cost basis are exactly the same on both my 7/31/2021 broker statement and Quicken portfolio view of the same date. If I enter the reverse 8:1 split in Quicken, I get the appropriate number of whole shares plus a fraction. The total cost basis of the stock remains the same (pre-reverse-split amount noted on 7/312021 broker statement) if I don't sell the fraction. It's only after selling the fraction, at a calculated price to result in the CIL I received, that the total cost basis differs between Quicken and broker i.e. there is a difference in total cost basis between Quicken and broker statement using 8/31/2021 amounts.
At the risk of further complicating things, I noticed on the broker website that the "Cost Basis Total" listed for ALL transactions differs from what I have in Quicken, except for the very last dividend payment of 1/23/2023 which is the same; the other transactions. including the dividends, have a slightly smaller Cost Basis Total on the broker website beginning with the 10/21/2022 dividend payment compared with the actual payment received. Of course I'm not sure if this is related to the GE Healthcare spin-off which I admittedly haven't tackled yet.
Thank you again!

Grimacing

The total shares and the total cost basis are exactly the same right up until the time of the reverse stock split. If I just enter the reverse split, the total cost basis of the shares still remains correct. It’s only after I sell the fractional share that the total cost basis amounts differ. I have never really sold anything, only a sale of the small fractional component for the Wabtec spinoff in 2015 although the numbers remained correct after that.

q_lurker

If I just enter the reverse split, the total cost basis of the shares still remains correct. It’s only after I sell the fractional share that the total cost basis amounts differ.

That the total is correct after the reverse split is good. Is the per lot basis at that point correct?

Note my edit above that the Wabtec spin-off should not have altered the GE basis.

Grimacing

No, the per lot basis doesn’t seem to be the same. The broker website gives me a cost basis for each lot, but in Quicken, the portfolio view only gives me the total cost basis for all lots (as I’m sure you know). If I use the purchase price of a given lot as the cost basis in Quicken, the basis for every lot is different from 2008 thru the October 2022 dividend. For example, 100 shares in 2008 cost $3,352. After the reverse split, the shares for this lot became 12.5 in Quicken which still lists the cost basis as $3,352. After the fractional share sale, Quicken lists 12.263 shares with basis of $3,289; the broker lists 12.443 shares and basis of $2,592. Same kind of differences for a second 100-share lot with similar differences between both the share quantity and cost basis amount. The only lot in Quicken that has the same cost basis as the broker website is the most recent dividend paid January 2023.

Jim_Harman

If you group a Portfolio view by Account then click the little + sign next to the security name, you can see the basis, cost per share, and other data for the individual tax lots.

You can also see this by clicking on the Holdings button while viewing an account, then clicking on the + sign.

q_lurker

For example, 100 shares in 2008 cost $3,352. After the fractional share sale, Quicken lists 12.263 shares with basis of $3,289;

That appears to be good math to me, if the fractional share was 0.237 shares. 0.237 shares had a basis of $63.00 for a per share basis of 265.82/share or 33.23 per original share (before reverse split). For 0.237 shares, out of 12.5 shares with a basis of $3,352, the FIFO basis drop should have $63.55 taking it down to $3,288.45. I realize you are doing some rounding.

the broker lists 12.443 shares and basis of $2,592.

That math by the broker makes no sense to me. That is saying 0.057 shares had a basis $760, a $13,333/share rate.

Is the broker spreading the 0.237 share reduction across all lots; every lot now has slightly fewer shares than 1/20th of the before split number of shares? That is what it looks like, they did not use FIFO for that C-I-L ‘sale’. But that still does not justify the $760 drop for 0.057 shares.

What does explain the $760 drop is the GEHC spin-off done in early January which would have reduced the basis of all lots by about 22%.

The two events CIL sale and GEHC spin-off need to be correctly handled individually. Do the sale and specify lots such that each lot's shares are properly reduced. Quicken can do the math.

Then we can address the GEHC spin-off which may be equally frustrating for you.

Grimacing

Thanks to everyone. I think the only way I’m going to match GE (and now GEHC) to the broker statement is to adjust every lot based on the information available on the brokers website (fidelity) which gives the number of shares and cost basis for all lots of both. I was able to get the brokers statement and quicken to align for shares and cost basis of GE up through the end of 2022. The GEHC spin off is another matter. For example, I have 3 lot purchases of GE stock all of which were for the same number of shares. After the 1:3 GEHC spin off, basis on the first lot decreased from a few thousand to about $250 according to Quicken yet on the broker website, basis for this lot is about $2600-- a big difference. The other two Buy lots also differ by several hundred dollars each. Remaining lots are just dividends and reinvested dividends, all of the latter differing slightly between the two. I tried the “Shares Transferred between Accounts transaction where the shares of the one security are transferred from the existing account to the same account” q_lurker has mentioned on other threads but wasn’t sure what to do with the Bought, RtrnCap and Div (as opposed to ReinvDiv) transactions. I also tried adjusting the return of capital so the cost basis for each lot would match up between quicken and broker, I’m not sure I did that right either. Guess I’m asking for the Complete Idiots Guide to fixing this so I have the same data as the broker. Thanks again.