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.