Commission vs. custom budget category for expenses

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This is difficult to explain, but when tracking the shares for a VUL policy that doesn't offer online updates, I've been manually creating the buy shares transactions, and I haven't been using the Commission field, mainly because I would rather use my own custom category for that expense instead of whatever Quicken uses behind the scenes. But I just noticed that's causing the investment cost basis to be lower than it should be. When I look at the 'Holdings' view or a report, the Cost Basis is lower than if I were to delete my MiscExp transactions and add that expense in the Commission field, the Cost Basis goes up which is what I want. However, I can't see those commission expenses in my Budget, even though I verified the VUL account is included in the Budget, and when I look at the Budget categories I've enabled Hidden categories but I can't find whatever Quicken is using for these commissions. To summarize,

1. Is there any way to enter expenses as a separate line and have it affect the cost basis of a security?
2. If not, how can I see the Commission category in my budget?

Thanks!

bmciance

1 - No, but see comment below*

2- It is not an "expense" if it increases your cost basis so why would you want to see it in your budget? The only thing you can do is get a report of commissions by customizing an investment transaction report to only show that column. There is no line to add into your budget however.

*The only thing I can think of is if you enter the expense as you do you would have to enter another separate transaction to increase the cost basis. You can do this by entering a shares added transaction with the shares being a very small number like ".0000001" and the amount being the amount of the commission. This will add that much to your cost basis.

q_lurker

• The summary answers

1. No.
2. You can’t.

The commission amount folds directly into the cost basis of the security being bought or sold. There is no ‘separate’ or ‘hidden’ category that they work through.

Might I ask how do you budget for the base cost (excluding the commission) of your purchases?

bmciance

1 - No, but see comment below*

2- It is not an "expense" if it increases your cost basis so why would you want to see it in your budget? The only thing you can do is get a report of commissions by customizing an investment transaction report to only show that column. There is no line to add into your budget however.

*The only thing I can think of is if you enter the expense as you do you would have to enter another separate transaction to increase the cost basis. You can do this by entering a shares added transaction with the shares being a very small number like ".0000001" and the amount being the amount of the commission. This will add that much to your cost basis.

ProfileX

Thanks for the ideas. This isn't really a commission, it's actually a monthly management fee. In a normal brokerage account with multiple securities, I want a management fee to be separate from each trade and not entered as a commission (and the fees usually come out of the account's cash balance). But in this case the VUL account only has a single security, and the fee gets subtracted from each deposit, so I've decided I want the fee to affect the cost basis directly, since that seems like it's giving me a more accurate picture of the performance.

I don't think it's worth entering double transactions, I guess it's not a big deal if it no longer shows up in the budget, I would just like to see it there since it's part of where my money is going & feels more like an expense.

q_lurker

• The summary answers

1. No.
2. You can’t.

The commission amount folds directly into the cost basis of the security being bought or sold. There is no ‘separate’ or ‘hidden’ category that they work through.

Might I ask how do you budget for the base cost (excluding the commission) of your purchases?

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https://community.quicken.com/discussion/comment/20485948#Comment_20485948

Thanks for the reply. Not sure I understood your question, but basically I contribute a fixed amount once a month:

- a portion goes to the cost of life insurance (which I enter as an expense category and see in my budget)

- a portion goes to an investment mgmt fee (which I've been entering as an expense category but decided I want it to affect the cost basis)

- the remainder purchases shares of a single security (which I don't see in my budget and don't expect to)

q_lurker

https://community.quicken.com/discussion/comment/20485951#Comment_20485951

The premise behind my question:

Suppose you monthly transfer $X from checking to the Variable Universal Life policy account. You might have that as a transfer transaction (not budgeted as an expense), or you might have that as a budgeted expense to a category along with an independent deposit in the VUL policy account. In either case, you then somehow buy ‘shares’ of the VUL policy.

In that second case, you could record in the checking account two transactions or a split transaction with the commission (management fee) broken out separately.

I am not suitably informed about VUL policies to know if that management fee can or should be considered in the basis.

ProfileX

https://community.quicken.com/discussion/comment/20485970#Comment_20485970

Thanks, that sounds like what I've been doing, a split transaction that has 2 expenses and 1 transfer. But I've decided to change the split to 1 expense and 1 transfer, and record the fee as a commission. If someone's VUL policy has multiple securities, I would recommend keeping any management fees separate (I treat mine like an IRA & ignore the fact that there's a life insurance policy attached to it). Just like an IRA, it would be way too difficult to decide/track which percentage of the fee was tied to each security. But since this VUL is only invested in 1 security, I've decided to include the management fee in the cost basis.