3 Transactions for my Reinvested Dividends

Ken A

I receive automatically reinvested dividends in my taxable brokerage account. When I download transactions (auto update) my brokerage reports three transactions, one showing a cash dividend (e.g. +$100.47), then a shares added transaction (e.g. +100 shares), then a Withdrawal for the cash to buy the reinvested shares in whole share amounts only (e.g. -$100). The small remaining cash balance (e.g. $0.47) adds to my cash balance in the account.

The problem is the brokerage (or Quicken) records the dividend transaction as _DivInc, the shares added does not have a category option, and the cash withdrawal transaction is left categorized.

This results in a large amount in the uncategorized transactions section of spending reports. If categorize the cash withdrawal to purchase the dividend generating shares, I will essentially zero (almost) out the Div for tax reporting purposes, which would be incorrect.

The same thing happens with Long Term Cap Gains (CGLong) transactions, where the 3 entries are CGLong, Added, Withdraw (this time for the full amount so no residual cash balance). The Withdraw transaction is left uncategorized.

Questions:

1. How should I categorize the cash withdrawal to avoid the large uncategorized amounts?
2. Is there a way of entering the cost of the reinvested share or Capital Gain in the Reinv - Income transaction?
3. Is there a better way to deal with these 3 transactions?

I don't want to have to manually override numerous transactions every month.

Using Quicken Premier R51.12 Build 37.1.51.12 on Windows 11.

Appreciate any guidance the group has.

[Deleted User]

@Ken A

1. The cash withdrawal should have a "dummy" category or an offset such as "Cash Withdrawal for Shares Received" or "Cash Offset for Shares Received".
2. The cost is usually created by the purchase of stock shares. In your case the cost is created by the Add transaction. This goes for dividends as well as cap gains. Just ensure that the Add transaction is showing the correct cost.
3. Yes there is a better way. It would be just 2 transactions. A dividend, or Cap Gain transaction coupled with a purchase of whole shares of stock.

I am not sure why there are three transactions for your stock purchases. Usually you would see cash dividend and then 3 days later a stock purchase. You didn't mention if the three transactions were posted at the same time or on different days. It could be their way of getting around the T+3 settlement. Just a guess on my part.