Return of capital

q_lurker

How about this exercise in a test file just to make sure we all understand each other:

• 1/1/23 Buy 100 shares @ $10/share = $1000 cost
• 2/1/23 Buy 50 shares @$15/share = $ 750 cost
• 2/15/23 RtrnCap of $150

A Portfolio view will look like this:

Note that the Cost Basis for each lot has been reduced by $1/share; by $100 for the first 100-share lot and $50 for the 50-share second lot.

Now redate the RtrnCap from 2/15/23 to 1/15/23. The Portfolio view changes accordingly. The $150 all comes off the first lot (the only lot that existed when the RtrnCap dated 1/15/23 applied.

Now sell 25 shares, say for $20/share = $500. If those shares are treated as FIFO (first in, first out; Quicken's default), they represent 1/4 of that first lot holding. The basis of the entire lot is $850. The basis of the 25 shares of that lot is $212.50. That is what the capital gains report shows for a capital gain = $500 - 212.50 = $287.50.

Obviously, if you specify the sold shares as from the second lot, those cap gain figures change. The basis would be 1/2 of the $750 applicable to the 50 share lot. The realized gain would be $500 - 375 - $125. It matters which shares you indicate are sold.

The Investment Transaction Report come out looking like this (after FIFO sale):

While your case is more complicated because of more transactions, the principles are still the same. From your descriptions, I cannot tell what your brokerage is doing; how they are processing the 1099 Return of Cap date with respect to the timing of your sales. What I have tried to demonstrate above is how Quicken is (should be) handing your data based on transactions in your records. The catch in that regard is as I recently pointed out: If you edited a Div transaction to make it a RtrnCap transaction, something might be off. In that case, you need to delete that (edited) RtrnCap and re-enter it from scratch.

In spite of what Quicken Support might have stated, I am doubtful that they are "working on it". My sequence above works exactly like I would expect it to.

Charlie R

@q_lurker
It looks like you put a lot of work into this and I appreciate it.
I started another new test account and I post everything exactly the way it happened, I noticed that after buying the new 1000 x-div Shrs of BRW Q increased the amount of Shrs to 2500 so the next RtrnCap shows 2500 Shrs but the last lot I bought was x-div and the RtrnCap should be for only 1500 Shrs. If I move that RtrnCap to the broker's Rec date, which is before I bought the x-div lot the numbers then match the post and the CapGains report. (In the test file only not the actual file.)
I only owned the the x-div Shrs for 1 Div/RtrnCap.
My broker shows on my statement a Rec. date and a post date for the Div/RtrnCap this has never mattered in the past, it the monthly that's causing the problem,
Thanks again, I hope Q can fix it all my BRW numbers in my actual are wrong.