What is the "best practices" on an ETF merger where everything maintained its original lot detail

bflikkema

I'm trying to fix my quicken data for the SLY merger into SPSM that occurred on June 12th, but can't figure out the right way to do this. I'm running windows version R51.12, build 27.1.51.12.

A lot of Schwab stock data doesn't import correctly. And even when I look at transactions on their site all I get from Schwab is the 6/12 date with the total new number of whole shares combined and a cash in lieu. When I look at the lot details of SPSM, I see each lot of SLY shares came across with it's original cost basis and acquisition date, just with a new share amount.

A few community posts say to use the corporate merger (share for share), but that requires entering anew share price after the merger. The SLY holdings didn't become a new share at a new uniform price. Looking at the lot details, each existing lot of SLY became a new lot of SPSM, again maintaining it's original acquisition date and cost basis, just the share balance and share price adjusted.

I thought about trying to enter this as a stock split for SLY and then merging the securities but I don't find quicken allows just merging securities. And just changing the security name of the old sly transactions would obviously screw up the original data for SPSM since it couldn't distinguish between the two anymore. Plus the calculations are close but not exact. It was almost a 2.223:1 split. But only 10 of the 15 lots work with that, some of the others lots calculate at 2.2295:1 and some came across as 2.22301:1.

Right now the only thing I can come up with is just deleting the SLY data and doing a separate add transaction for each new lot of SPSM, using the original acquisition date and cost basis but the new share quantity. Thankfully it's only 15 lots, but still a lot of busy work. Anyone have a better idea? Or what is the correct way to enter this?

q_lurker

When I look at the lot details of SPSM, I see each lot of SLY shares came across with it's original cost basis and acquisition date, just with a new share amount.

Where are you seeing that information? On a Schwab website or from within your Quicken data? What you describe seeing is what you should be seeing. The new share quantity should be 2.223 times the SLY lot shares — rounded to some precision. But there is also the aspect that you should have ended with a whole integer number of SPSM shares and some cash-in-lieu. So the Schwab data may reflect that some SPSM shares were effectively immediately sold for the cash-in-lieu amount and thus those lots hold a lesser number of shares and a lesser cost basis than the corresponding SLY lot.

The Corporate Acquisition should work. Your input would be:

• Date = June 12, 2023 (or June 9, if that is accurate)
• Company Acquired = SLY
• Acquiring Company = SPSM
• New Shares issued = 2.223
• Price per share = 38.50 (based on Yahoo Finance historical data close for 6/12/23 for SPSM)

Using that process, every lot of SLY will generate 2.223 times as many SPSM shares with the original cost basis and acquisition date. Those will come through in Quicken as Add Shares transactions dated 6/12/23. Share quantity will be to 6 decimal point precision. Schwab may not be maintaining that same level of precision. If so, I would edit each the Add Shares share quantities accordingly. This will undoubtedly result in a total share quantity that includes a fractional share. You would sell that fractional share for the cash-in-lieu received. When you sell that fractional share, consistent with what Schwab is doing, you would choose which lots the fraction came from. All in all, the cash-in-lieu, the associated capital gains, and related are likely really small and not too important to the big picture, but I am OCD enough that I try to get all those things 'right'.