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Why is cost basis -- and Gain/Loss -- incorrect?

Barnabas

I have one particular security — VDIGX — that I hold in two different accounts.

Quicken is showing an overall loss for that security, although there is a gain on every lot.

The sum of the cost bases for each lot does not match the overall cost basis provided by Quicken.

This doesn't make sense, and the arithmetic simply doesn't work.

I have validated the file, with no change to the computation.

As far as I can see, the error appears for this one security only. If I look at another security, and sum the cost bases for each lot, I get the overall cost basis.

Can anyone help me understand what's happening, and how I might fix the issue?

Thanks for any help.

Screenshot 2024-01-23 191212.png

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Barnabas

Just to clarity: Here are the screenshots with headers included.

Screenshot 2024-01-23 191615.png

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Jim_Harman

That does seem odd.

Please go to Edit > Preferences > Investments and make sure the Show hidden transactions box is checked. This will reveal any hidden Placeholders. Then go to an affected account and look for any Placeholders or other unusual transactions for this security.

If there are not any, I would back up the data file, then select a transaction in an affected account and hit Ctrl-Z to recalculate the investing transactions.

If that does not fix the problem and you have not already, go to File > Validate and Repair file with the Rebuild investing lots option to see if that fixes it.

Please let us know what you find.

Pumbu

Barnabas, I have basically the same issue. With my broker I have two stock accounts. After a stock's shares are moved from one to the other and I download the data from the broker's website, the cost basis is Zero. Which really messes up the cost gains of a stock. It ends up showing the Gain as the current Market Value. The brokerage transactions that are downloaded are "Removed" and the destination account calls them, "Added". I think they should automatically called, "Shares Transferred Between Accounts". But, if I go and manually change the action to "Shares Transferred Between Accounts", the dollar amount is added back into the losing account. Which is not correct. Yesterday I called Intuit. They said it is because of how the brokerage handles the data in the computer system. I called the Brokerage support line and they were stumped and never called me back. I have conducted all of the Validate and Repair choices in Quicken, still not fixed.

q_lurker

@Barnabas Do you have a history of transactions with this fund prior to those lots?

If so, setting the As of Date for the portfolio view back in time to before those lots were acquired what do you see? You may need to toggle the option for the view to Show Closed Lots.

Hopefully, you'll be able to go back in time to when this oddity first developed and then possibly delete and re-enter some specific transaction(s) to correct the problem.

@Pumbu You really have a different issue. Basically, you cannot rely on the brokerage downloads to send cost basis information when shares are transferred. You need to delete those downloaded transactions and then use the Shares Transferred function within Quicken from the old account to send the shares to the new account. Or you can edit the Add Shares transactions in the new account to include that supplemental information. If you need to continue this conversation, please start a new discussion or tag on to one about transferring shares.

Pumbu

Will do. I will start a new discussion.

Jim_Harman

@Pumbu I think the problem you describe is different from what @Barnabas is seeing. It is common for brokers to download Removed and Added transactions with zero cost basis for the Adds. "Shared transferred between accounts" does this correctly. The description below is for a complete conversion from one account to another account of the same type, but the same approach applies when you are just moving some of the holdings. Note that you must do this differently if you are taking a distribution from a retirement account or doing a Roth conversion.

This will enter one Removed transaction for each security currently held in the old account(s) and an Added transaction in the new account for each tax lot of each security. It preserves the cost basis and acquisition dates of the securities transferred. The original cash and security transactions will remain in the old accounts.

Make sure the holdings in your old account(s) prior to the transfer are up to date and accurate.
Back up your data file in case something goes wrong.
If closing the old account, in the old account(s), click on the gear, pick Edit account details, and on the Online Services tab, click on Deactivate.
If there are transactions in the old account(s) that remove the holdings for the transfer, delete them.
Set up the new account in Quicken if you have not already. If there are already transactions that transfer the holdings into the account or transactions that duplicate ones that are already recorded in the old account, delete them.
In the old account(s), click on Enter Transactions and pick Shares transferred between accounts.
Select All securities or the ones to be transferred and click on Enter/Done.
If there is any cash in the old account(s) that is moving along with the securities, enter a Cash Transferred out of account to move it to the new account.

When reporting on performance over a period that includes the transfer, include both the old and new accounts in the analysis.

Pumbu

Jim, I started another Discussion, but will try what you describe.

Barnabas

@Jim_Harman,

Thanks for your reply. I followed your suggestions; here is what happened:

I found that the "Show Hidden Transactions" box was already checked. There are no placeholders for either account that has the error.

I tried ctrl-Z to recalculate the transactions; nothing was different.

I tried rebuilding the investing lots; again, nothing was different. The rebuild process reported as follows:

[Wed Jan 24 20:54:01 2024]
Rebuilt investing lots.
No out-of-range security references found.

So unfortunately, none of your suggestions has affected anything.

Barnabas

@q_lurker, I have the complete set of transactions for the fund.

Looking at just one of the accounts with the error, I discovered by fiddling with the "As of" date that the Cost Basis and Gain/Loss amounts start being incorrect on 2023-08-22. I verified that by exporting the Portfolio view to Excel and looking at the sum of the numbers for the individual lots vs. the total shown by Quicken.

I found that the Cost Basis and Gain/Loss numbers started being wrong on 2023-08-22, which I verified by exporting the Portfolio view to Excel and checking the column sums against Quicken's column total.

So I began deleting and re-creating every Sell transaction for that security beginning on 2023-08-22. Only after I had done this for all transactions beginning on that date did the arithmetic start being correct again; i.e., the totals of Cost Basis and Gain/Loss for each lot equaled Quicken's totals.

I'm at a loss to understand why deleting and re-creating a bunch of transactions would fix the problem; but somehow it did.

The only issue I have now is that Quicken's cost basis doesn't match what Vanguard shows. I attribute that to the fact that Vanguard insists on using the "Average Cost" method (vs. FIFO) for these [retirement] accounts; and so the accounting for that method will differ from the FIFO method.

Anyway, thanks for the suggestion. When I have some more time, I'll try the same thing with the other account that's having this problem, and see whether the fix works there as well.

Barnabas

@q_lurker I tried tagging you in my previous post but it didn't work… so tagging you here.

Tom Young

@Pumbu

Your original post about this was answered here:

https://community.quicken.com/discussion/7946064/cost-basis-not-being-downloaded-from-brokerage-after-shares-transferred-between-accounts

Barnabas

@q_lurker I'm happy to report that after I made the same change to the other account (i.e., deleting and re-creating the "sell" transactions), the Cost Basis and Gain/Loss arithmetic is now correct. Thanks for the suggestion.