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Cost Basis not consistent

funkws

Checking the impact of a potential sale, I noticed that the cost basis for the stock on the capital gains report was not the same as the gain shown on the account summary. Looking at each lot showed that this was also the case for each lot I checked. This is a very old holding with multiple splits and spin-offs. Any ideas on which report is accurate or how to make them match?

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funkws

Also - neither report matches my broker's report for capital gains (of covered lots)

q_lurker

the cost basis for the stock on the capital gains report was not the same as the gain shown on the account summary. (Emphasis added)

Cost basis should not be the same as gain, but I suppose you just crossed up the words; that you were actually comparing the cost basis in the CG report against the cost basis shown in an "Account Summary". Account Summary might be via the Holding button (more accurately called an Account Overview) found in the account transaction list or some Portfolio View. But maybe you mean something else.

To get the data in the cap gains report, you would have needed to enter the sale in the transactions list for the account. Was that a sale of the entire holding for that security in that account?

That sort of Account view I mentioned can be expanded to show each lot (clicking the + next to the security name). Is that the lot by lot comparison you were making?

Any ideas on which report is accurate or how to make them match?

Not without knowing more exactly what you did and what you are actually comparing.

Being an old holding with multiple splits and spinoffs can certainly mess things up and create many spots where you might diverge from the brokerage's approach. Splits should not really be a problem since all the basis stays within the shares held although related cash-in-lieu amounts might make a small difference. Spinoffs send some of the basis from the parent to the new-company spinoff. So much depends on how rigorous you were and how rigorous and correct the brokerage was and what efforts you made to match the brokerage data with each transaction.

Identifying the security might offer some clues, but I really can't see determining much without seeing the actual details.

funkws

Hi q_lurker.

I see I did a poor job of explaining the issue. Let me provide a few screen shots I took before and after entering a sale for all lots. I did this on Saturday so there would be no price fluctuations.

Before the sale of all shares entered, this is what the account overview shows:

Last four lots:

After entering the sale, the capital gains report shows this:

Bottom of the same report:

So the number of shares (as witnessed by the same market value) matches, but the cost basis does not. (Even though there appears to be an extra lot on 4/2/87 on the overview) I checked the see that the account overview has the cost shown on the individual reinvestment transactions. So it appears the capital gains report is somehow got bad data for the lot basis.

Am I missing something or is this just a program bug?

q_lurker

With a good backup at hand …

I would consider a Ctrl-z from the account transaction list. That will recompute the account. May make a difference.

I would validate the file choosing the rebuild lots option. Might make a difference.

Outside of those steps, how do any of those prices compare to the value of the reinvested dividend? I noted the Baxalta spin-off in 2014 took some 44% of the basis. I didn’t dig deep enough into other possibilities. Also, what is the broker’s cost basis for any of those lots? How does that compare to the original cost of the lot.

I have never seen that type of discrepancy before. I suspect your data file and records more than a specific program bug.

NotACPA

@funkws, Do the involved securities have ANY sale transactions?

When recording such sales, did you select the same investment Lots as you broker? Unless you specified otherwise, at the time of the sale, you broker almost certainly selected lots using FIFO. Did you do the same?

If not, or if your lot selection varied in other ways from that of your broker … your Cost basis as shown in Q will differ from that which the broker shows.

funkws

Thanks for the observation. There were a few sales but these were all uncovered lots, so the broker did not have any data. I used FIFO for all of these.

funkws

Thanks for the info.

I tried both, but no change in the resulting reports.

I then looked at individual transactions and compared that data to the broker info. Things matched the account summary report up until the BAXALTA spin-off. At that point the broker matched the individual transaction as found in the log (a dividend followed by a return of capital then a BAXALTA buy). So (to me) it looks like both the capital gains report and the account summary information are doing something odd.. I can manually go through the transaction log to calculate the gain or loss per lot - but that won't be the most fun I've had.

At this point I am hoping this is a user error (by me), but the inconsistencies are an issue regardless.

q_lurker

When did you enter (what Quicken version might you have used for) the Baxalta spin-off? Now asking that question, I don’t know that I can attribute meaning to any answer you provide. The gist of the question is that at various times, the Corporate Spin-off action in Quicken has produced inaccurate transactions. Some versions have been better than others. Return of capital transactions for multiple lot holdings are currently a problem. In 2014, I don’t recall.

But that said, it still does not explain the differences between the pre-sale and post-sale reports.

Another possibility you might try would be to delete the current two transactions and try a fresh current spin-off entry which will not use the RtrnCap entry.

PS: If the Baxalta was a ‘normal’ spin-off, the RtrnCap and Buy Baxalta would not have been correct by any measure. The various newly issued Baxalta shares should have had Acquisition Dates matching the Baxter dates back to 1997.

All this becomes a ‘how far’ question. Did the brokerage manage this stuff right, even the uncovered shares? Do you have reason to trust or not trust their numbers? Deleting and re-entering is the likely solution but I can’t predict the scope of that need.