Funds takeover
Hi, one of my holdings in a Trust Fund (71,332 shares) was just closed/transferred/taken-over by another Trust Fund within the same holding company with 48,185 of the new shares issued. How do I manage this is Quicken? Appreciate any help.
Stan
Best Answers
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Try the Mutual Fund Conversion (via Enter Transactions button), provided you were not using Average Cost) for the New Dawn (surrendered) shares.
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My general policy after that conversion is to round the shares on each Shares Added to 3 or 4 decimal precision, but still get to the right actual total. I believe that better matches the brokerage holdings and tends to avoid precision problems in the Quicken records.
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Good point. At the moment I am showing 48,184.999969 - 0.000004 out🙄
Messy.
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Answers
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I should add - I had thought of simply Selling the shares of the defunct company and Buying the shares in the take-over company but that would result in a Capital Gain, which I have not enjoyed.
Stan
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It would be extremely helpful if you identified the two "Trust Funds." Frequently there's no "one size fits all" answers to corporate actions so naming names can allow a respondent to review the available information and provide a "specific to this corporate action" answer.
If it's a situation where one mutual fund was folded into another mutual fund in a tax free exchange than a "Mutual Fund Conversion" action MIGHT be the appropriate approach. That should result in no gain or loss and no change in the security's holding period. But that's not a definitive answer.
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Hi Tom and thanks for the reply.
See here
Aberdeen Assets has New Dawn (LON:ABD) and Asia Dragon (LON:DGN) in it's portfolio. New Dawn was taken over by Asia Dragon so 71,332 New Dawn shares were 'sold' and ~48k Asia Dragon were 'bought' with the proceeds.
Appreciate any further help.
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Try the Mutual Fund Conversion (via Enter Transactions button), provided you were not using Average Cost) for the New Dawn (surrendered) shares.
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(I love the British use of the word "Scheme" through out the documentation of the transactions. To US ears it makes it sound so devious and underhanded, doesn't it?)
(As an aside the documentation which basically only deals with UK taxation issues does have this to say for US owners: "The Scheme may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other tax laws. Each US Shareholder is urged to consult their independent professional adviser immediately regarding the tax consequences of making a decision regarding the Scheme." I'm certainly not in any position to opine on this.)
So IF the transaction is a non-taxable event for you THEN the Mutual Fund Conversion should work fine, with the caution that it should not be used if you've been using Average Cost for purposes of determining basis. (Quicken bug.) If you have been using average cost then "Corporate Acquisition (stock for stock) could be used as the alternative.
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That seems to have worked! At first it looked daunting as it produced a huge number of entries, then I see it converted each of the multiple 'Lots' separately.
😁
Thanks for the help
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My general policy after that conversion is to round the shares on each Shares Added to 3 or 4 decimal precision, but still get to the right actual total. I believe that better matches the brokerage holdings and tends to avoid precision problems in the Quicken records.
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Good point. At the moment I am showing 48,184.999969 - 0.000004 out🙄
Messy.
0 -
Good point. At the moment I am showing 48,184.999969 - 0.000004 out🙄
Messy.
0