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New Quicken File Updating Cost Basis

allgoodnamestaken

Starting over due to severe corruption of the original file. I'm basing the new file on data ending 1-31-2024 (after receiving all statements).

I entered all of my stock and fund holdings using the "add" option. At this point (March) everything is matching the monthly statements except for cost basis.

In researching cost basis I'm confused over the different philosophies and suggestions.

When setting up the new Quicken file under the "add" option, should I have entered the number of shares and price paid based on "date acquired"? Some of these stocks and funds go back 20 years, I can't go back and enter all the missing data, it's too massive. I would just like to have "cost basis" match my broker statement. I use Quicken to keep track of these holding but I'm not using Quicken for tax purposes so FIFO or LIFO is not important.

Thank you

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NotACPA

If there were any sales of those securities, your cost basis in Q WON'T match the brokerage's figures UNLESS you chose the exact same lots to sell as the brokerage chose. Thus, LIFO/FIFO is important.

q_lurker

Restating the comment from @NotACPA

You can certainly use the Cost field in the Add Shares transaction to match the broker's cumulative cost basis data as of your chosen 1/31/24 date. But when the broker later makes a partial sale, the way the broker considers the associated cost basis and determines the associated capital gains will not match the way Quicken will treat cost and capital gains for that sale. So in the future cost basis may not match. To keep them matching, you need to match each lot of each security.

allgoodnamestaken

So if I understand correctly, there is no way to get an accurate cost basis when setting up a new Quicken file if you already own the stocks and funds, short of entering years of data? However, any new purchases would reflect an accurate cost basis?

Thank you.

[Deleted User]

@allgoodnamestaken unless I am not understanding your situation, you can adjust cost to whatever it needs to be. I am able to pull down a spreadsheet from my broker and compare the cost to what's on Quicken. If there are any differences, I use an "Add Shares" transaction with zero shares and the cost adjustment (neg or pos). Here is an example -

To be able to enter zero shares, type in 0.00000001 and the number of shares will change to "0".

Jim_Harman

So if I understand correctly, there is no way to get an accurate cost basis when setting up a new Quicken file if you already own the stocks and funds, short of entering years of data? However, any new purchases would reflect an accurate cost basis?

It is easy to set the total cost basis to match your broker's figure; you simply enter the Total cost and a Date Acquired in the Added transaction.

But if you have multiple lots of a security, from reinvested dividends for example, and you sell a portion of your holding, the capital gain for the sale and the remaining cost basis will not be correct.

allgoodnamestaken

These holdings have years of reinvested dividends, so based on the consensus, i will not be able to have an accurate cost basis unless I go back and enter each transaction?

I appreciate everyone's help, thank you.

Chris_QPW

https://community.quicken.com/discussion/comment/20422872#Comment_20422872

Just to give an example of why the cost basis will be wrong for the old (not new) securities when sold (but you could then readjust the cost basis).

Buy: 100 at $10, 100 at $11 = cost basis for both security lots together ($1000 + $1100) = $2100 which is $2100 / 200 = $10.5 per share. And that is what you have recorded to get the right cost basis at the moment 200 shares at $10.5.

If you sell 10 from the first lot, your broker is going to record that as 10 * $10 for the cost basis. In Quicken you are going to record 10 * $10.5.

[Deleted User]

The time and effort to get the cost basis absolutely "correct" by tax lot on Quicken is a waste of time, in my opinion. Using Quicken to track investments is just a tool for the user to get an idea of where their assets are. It isn't and shouldn't be the end all and be all. It's not the system of record. It's not going to affect anything in the "real world". It's not going to affect what is reported on the 1099-B at the end of the year.

I personally, don't see anything wrong with @allgoodnamestaken setting up the assets via Add Shares, and then adjusting the cost to reflect his broker, and just leave it at that. If there is a difference between Quicken and the 1099-B, bottom line, the 1099-B stands. At that time an adjustment can be made to bring Quicken and the 1099-B in alignment.

q_lurker

I find value in having accurate basis information in Quicken so I can make knowledgeable decisions on which shares to sell or gift. Frequently, having that on a by-lot level is further valuable.

Every user needs to make decisions based on their needs.

[Deleted User]

Your statement is very true that every user need to make their own decisions. I am basing my assessment from the statement from the OP that they are not using Quicken for tax purposes.

Jim_Harman

If all you care about is matching the cost basis on your broker's statement, then there is no need to keep track of the lot-by-lot cost basis. You can just enter the data from the statement into the Add transaction.

Be aware that if you have not entered the full history into Quicken, then Quicken's performance reporting, Net Worth history, etc. will start as of 1/31/2024, the date of the Add transaction. If you sell a portion of the holding, you will need to adjust the cost basis if for some reason you want the cost basis to continue to match the broker's statement.