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Recording Broadcom (AVGO) 10:1 split in Quicken

Pacificagurl

So I'm with Schwab (formerly a happy TDA customer) and trying to figure out how to record the recent 10:1 split on AVGO that was effective at close 7/12/24.

Schwab transaction activity simply has an entry adding the additional shares (9 for each 1 whole share) but I want to enter as a stock split to update all my various lots.

Then for the fractional shares which AVGO did not issue shares in the split, they simply show as cash in lieu and a dollar amount, no details how that was calculated.

When I tried entering into quicken as a 10:1 split, it's applied to the fractional lots as well which based on the AVGO FAQ doesn't apply. Brokerage appears to have given me cash for those fractional x 9 shares leaving my .0146 fraction in my account. Sadly the lot history though adds up to .146 shares making it not match the position shares further hindering my ability to get this transaction recorded in Quicken.

I would appreciate feedback from anyone else with this holding and how they went about recording it in Quicken, please.

Thanks.

on Quicken Classic Premier v R57.26

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Comments

Tom Young

Even though you actually received only the whole number of shares into the account, the correct accounting in Quicken is to allow the full 10:1 split, including the fractional share, to enter into the Transaction List. Then you "sell" the fractional share at a derived per-share selling price that results in a "proceeds" amount equal the the Cash in Lieu amount deposited into the Account by Schwab. This will result in a final position in the Account of the correct number of shares, the correct amount of cash associated with the split, (after deleting the downloaded CIL amount), and a gain or loss on the sale of the fractional share.

All of this is correct from the standpoint of GAAP accounting as well as Federal Income Tax accounting. (I expect that most people don't understand this and frequently overstate their income on their income tax returns by declaring the full amount of the Cash in Lieu as a form of "income", which it decidedly is not.)

IF you want your Quicken lot information to perfectly match what Schwab shows for AVGO, go and look to see how then determined where the fractional share that was sold came from. It might be FIFO, but I've never bothered to look.

q_lurker

To augment the accurate response from @Tom Young, you mentioned the AVGO FAQ regarding fractional shares. I assume that was this question and answer:

11. What will happen to fractional shares in the stock split?
Broadcom will not issue any fractional shares of Broadcom common stock in connection with the stock split. Holders of fractional shares of Broadcom common stock should consult their broker.

Frequently, the company is responsible for aggregating the fractional shares and selling them off in the open market. Perhaps in this case, Broadcom passed that task on to the brokerage houses.

Regardless, the basic process is the same. If you started with 100.1146 shares, you would be due 1001.146 shares. That is what the Quicken StkSplit transaction would produce for you. But you would only get from the overall process 1001 shares; the 0.146 shares would be sold (by someone soon after 7/12/24) at market rates (about $160-$170/share). If the company did that sale, every shareholder would get the same price/share. If brokerage houses are responsible, the rate might vary with each brokerage. Tom also points out that it would be up to (you and) your brokerage to determine from which lot the 0.146 sold share came from.

BUT perhaps that is not at all what you are seeing in your account. Rather than have me (or Tom) speculate, how about being specific about what you are seeing. How many shares did you have on 7/11/24? How many shares did you end up with on 7/15/24? What cash-in-lieu payout did you receive? Does that CIL value indicate either rate or number of fractional shares?

Fundamentally, it still comes down that your two transactions in Quicken are: a 10:1 stock split and a sale of whatever fractional share is necessary to bring you the the right final share count.

Pacificagurl

@q_lurker & @Tom Young thank you both for your responses. I had to contact Schwab as the lot details of the holding did no match the total shares held. I held .0146 fractional shares prior to the split. After the split the position showed .0146 still (consistent with AVGO saying no split on fractional shares). However the lot detail was showing .146 fractional shares. They opened a ticket and have since corrected the two to match. Both now correctly show the .0146 fractional shares. The also adjusted the cost basis for the CIL payout, which wasn't initially done either. I had done as Tom suggested originally and recorded the 10:1 split. Once Schwab fixed things on their end, I then "sold" the fractional share from the first lot. My overall shares held and the cost basis of the position now match Schwab. Schwab though in their ineptness adjusted the shares held for multiple lots yet only adjusted the basis on the first lot! Overall though we're a match. I'm just really fed up with everytime there's a merger or split I have to contact them to fix their system. They originally tried to tell me I'd have to wait for the 1099 next year to see how the CIL cost basis was handled. Sigh……