S-Corp shares cost basis adjustment

Everett

I have long term shares in an S-Corp reflected in Quicken. Federal and State tax liability for the S-Corp flows through to shareholders, and the shareholders pay their portion of income taxes on behalf of the S-Corp. This increases the shareholders cost basis.

Each year when the K-1 for the S-Corp arrives, I use the information to update a spreadsheet used to track the cost basis of the S-Corp shares.

I have not been able to find a method to duplicate this updating of the cost basis of the S-Corp shares annually in Quicken. As a result, When generating reports on gains/losses it is necessary to customize the reports to ignore the S-Corp shares so that the report is accurate, and then outside of Quicken add everything up to get an accurate picture of my tax situation.

IS there a way to track these basis changes in Quicken reasonably well? I have searched, and the solutions I have found address a one-time update of basis on the transaction that originally adds the shares to Quicken.

Thank you.

q_lurker

For that type of transaction I have typically entered a series of 'cash' income transactions consistent with the K-1. Some might have been dividends, some interest, some Misc with a special category like business income, some might have had a 'non-taxable' category. They all added up to the applicable cost basis adjustment unless there was some actual cash disbursement. Then a RtrnCap transaction as a negative amount would increase the cost basis of the 'shares' owned of the Sub-S.

In this case, I did not particularly care how the RtrnCap adjustment applied to multiple lots of the sub-S ownership. If that is important to you, you might need the Remove Shares / Add Shares approach.

Another possible tweak is to use a RtrnCapX transaction where the transfer account is identified as the same account getting the transaction. Such a self-referencing transfer account makes the cash come from or go into thin air - otherwise unaccounted for. That way your income transactions do not need to balance with the cost basis adjustment.

NotACPA

How are you currently recording those tax payments in Q?

What Q product are you running, and what's the BUILD of that product? This info is at HELP, About Quicken.

Everett

The tax payments are categorized as Fed and State estimated payments.

I'm using the premier subscription. When I get back to my office I'll update with the current build.

NotACPA

When I recently had to adjust the basis of a security, the recommended (here) process was to REMOVE the shares at the current basis and add them back at the new basis. Using the date of the Payment(s) for both actions.

q_lurker

For that type of transaction I have typically entered a series of 'cash' income transactions consistent with the K-1. Some might have been dividends, some interest, some Misc with a special category like business income, some might have had a 'non-taxable' category. They all added up to the applicable cost basis adjustment unless there was some actual cash disbursement. Then a RtrnCap transaction as a negative amount would increase the cost basis of the 'shares' owned of the Sub-S.

In this case, I did not particularly care how the RtrnCap adjustment applied to multiple lots of the sub-S ownership. If that is important to you, you might need the Remove Shares / Add Shares approach.

Another possible tweak is to use a RtrnCapX transaction where the transfer account is identified as the same account getting the transaction. Such a self-referencing transfer account makes the cash come from or go into thin air - otherwise unaccounted for. That way your income transactions do not need to balance with the cost basis adjustment.

Everett

q_lurker,

Your suggestion sounds like exactly what I have been looking for and have not found anywhere else. I will give this a try. Thank you.