How to handle stock split and contra entries

jmeander312

I had a small investment and after a merger, stock split, delisting and contra transaction, it now looks like the image below. One's the original that split and the other is the contra. How do I link or edit these so that they close and I no longer see them in my Fidelity holdings?

q_lurker

You'll get a lot better answer sharing the actual securities and the actual transactions that were recorded. Were those recorded transactions purely from the Fidelity download, or did you make changes to those?

Tom Young

Questions about somewhat convoluted "corporate actions" (which might be the case here) can best be answered by disclosing the securities involved. The reason I emphasize this point is that two corporate actions that, on their face, might look exactly the same can required entirely different accounting entries. You can thank our hugely complicated tax code for that situation.

"Contra transaction" doesn't go very far in explaining exactly what happened here, but based on your question and the snippet of the screen shot it looks like Quicken "sees" two different securities here, a long position of 8 shares of some (unknown) security and a short position of 7.84 shares of some different (unknown) security. So my best guess is that the second "contra" position is really a SOLD action of the 1st security, not a short position of some other security, so the correction that seems to be needed here is to edit the SOLD action to point Quicken to that first security.

Of course your direct question is "how do I link or edit these so that … I no longer see them …" which suggests that you want both of these two securities to go away completely. But converting the transaction that created the "short" position in the second security won't achieve that, you'll still be left with a fractional share, so the 1st security won't entirely disappear.

To really work this out satisfactorily I'd suggest adding the missing details of the name of the original security and details of your holding, the name of the 2nd security, and when this event happened. With that information I'm sure someone can help you get this straightened out.

One takeaway from this event is that simply can't depend on downloads from financial institutions to really get your accounting correct when it comes to many corporate actions, you not infrequently have to delete the transactions they send you and create your own transactions to get your positions properly stated and the underlying accounting correct.

jmeander312

Fair points about the ticker symbols. Between the small amount and mild shame over a fun little foray into equities with some found money (GME, anyone?) that ultimately slapped me hard, I tried to get by with minimum info. Mea culpa. We're talking FREQ and 358CVR025.

Correct that it's all (and only) downloaded data from Fidelity, I haven't entered anything manually. And yes, I just want to make them go away since they wash and I'm nowhere near tax reporting.

q_lurker

Managed to do some more digging on this. Reference:

https://ir.korrobio.com/news-releases/news-release-details/korro-bio-and-frequency-therapeutics-announce-closing-merger-and

So in summary, FREQ did a 1-for-50 split, issued contingent value rights (358CVR025), then merged into the new Korro Bio (KRRO).

Due to the reverse split, your 8 shares would have become 0.16 shares and you would have then been due 0.16 shares of KRRO. But since that is a fractional share, more likely they gave you some cash-in-lieu (CIL) amount rather than shares of KRRO.

For those two aspects, your indicated stock split is likely correct, but should be followed (probably a few days later), with a Sold of 0.16 shares of FREQ for the CIL amount received. Those two transactions should take your FREQ holding to 0 shares.

The contingent value rights are a little more vague to me - like whether you had 8 of those of 0.16 of those. Other digging suggests those may have expired worthless (Sell for $0, or simply Remove. Was any 'basis' ever reported for that holding, since my reference indicated it was a 'distribution' by FREQ?). Or maybe sometime later you received a small cash amount for that CVR which would be, in Quicken, a sale of those rights for the cash received.

Hope that helps clear up what might apply.