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Cannot adjust cost basis of a security without changing cash balance?

questionsforever

I have a stock in an account that has the wrong cost basis versus the broker cost basis. This goes back many years and many buys/sells. I want it to match the broker issued cost basis. If I do a return of capital transaction with a negative value, the cash balance of the account is changed. The investment account has a linked cash account. I.e. abc.investments + abc.investments-cash. Also the return of capital dialog box has the account and transfer account greyed out. You can only input the dollar value. The transfer account greyed out is the abc.investments-cash account.

How can I make the cash balance unchanged while adjusting upward the cost basis of the security?

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Jim_Harman

If you want to adjust today's cost basis for a security, you can Remove the shares and Add them back with the correct basis. The problem with this approach is that if you hold multiple lots and you make a partial sale in the future, your basis will no longer be correct.

To completely clean up the basis, you would have to Add back each lot you currently hold with the correct acquisition date and cost.

q_lurker

Change the RtrnCap to RtrnCapX and specify the Xfr Account as the same account the transaction is in. The Cash portion disappears.

questionsforever

https://community.quicken.com/discussion/comment/20400448#Comment_20400448

This did not work. As soon as the 'enter' key is pressed, the cash balance is adjusted. If I enter -5000, the cash balance is adjusted upward by 5000.

I am not sure why there is a discrepancy between the broker and quicken for this one security as I entered the transactions exactly as in my statements. I do believe about 5 years ago the broker statements changed method from fifo to avg-cost and I had owned some lots from before. Possible explanation. Either way, since I entered each transaction by hand, the only thing it could be is a mismatched currency exchange rate. forgot to mention but its a foreign stock and my base currency is not USD.

q_lurker

Given those complications, I take Jim's approach - one Remove Shares, one Add Shares reflecting current shares owned and their basis. If all Average Cost now, multiple lots should not matter it would seem.

questionsforever

Any other solution to maintain the lots and adjust the cost basis up $5000? I tried a reinvest dividend/cap gain transaction type but then the portfolio FMV and cost basis report shows a crazy quote/gain, although the cost basis did adjust up as expected. When I went to delete the entire modification transaction, Quicken kept some crazy quote for that date still and I had to backup an old file. I am not sure how Quicken does a Reinvest type transaction but it seems when you go to delete it, it does not revert the quote of the security back to the original. Maybe a bug?

NotACPA

My guess would be that the discrepancy in Cost Basis arose when you sold a partial position in a security.

Unless you chose, in Q, the exact same lots as your brokerage chose (probably FIFO) there will be a difference in Cost Basis remaining.

Magnify that over many years and many sells and you've got yourself a problem.

Jim_Harman

I tried a reinvest dividend/cap gain transaction type but then the portfolio FMV and cost basis report shows a crazy quote/gain, although the cost basis did adjust up as expected. When I went to delete the entire modification transaction, Quicken kept some crazy quote for that date still and I had to backup an old file.

Deleting a transaction does not affect the price history in Quicken, but fortunately it is easy to correct.

From the Security Detail view, click on More then Edit price history. From there you can edit or delete any incorrect prices.

Robert Honeyman

I have accounts with TIAA. When those funds issue dividends and capital gains, one of my accounts handles everything seamlessly. My other accounts - including my IRA - require me to make manual entries to reflect the actual distributions to offset the new share purchases. That's a bit annoying but not the end of the world. It's just weird that one of the accounts does everything without my needing to intervene. I wonder if there's some sort of setup in Quicken that would fix this.

But, more importantly, when I reinvest distributions and the cost basis gets increased accordingly, it kills my ability to understand the true gains I've made on my payroll deductions. It's not a trivial problem. Am I really underwater, or is my ROI artificially skewed because of how my tax-deferred funds are managed?

Specifically:

I had $5k in distributions. Market value remains the same - as it should - but the basis goes up $5k. So instead of Q showing me at break-even, it shows, my portfolio is $5k in the red. Computationally, I understand how that works, but I'd sure like a data point that shows what my cash investments are to allow what I think is a fairer method of evaluating performance.

Robert Honeyman

I figured out a way to do this using Investing Activity report. Turns out I'm doing much better than I thought.

questionsforever

If you run a portfolio & cost basis report and you had done a return of capital transaction to adjust the cost basis, and you click the 'show lots' on the report, the lots show adjusted for the return of capital?