Don't ask about Cost Averaging or Lot Selection

dburk

Consider providing a checkbox when there is a prompt to Cost Average or do a Lot Selection. The checkbox would give the user the ability to say that for this account, please use the answer I'm giving you now for when this question is raised.

Similarly, consider not asking at all for an account where it doesn't matter such as an IRA, SEP IRA, Roth IRA, 401K, etc. The answer doesn't matter and it takes a LONG time to process…longer than I believe it should. It feels like endless waiting.

[Deleted User]

@dburk - I think there is a way to already do this? If you click on Edit→Preferences→Downloaded transactions, and then click on Settings by "Lot assignment…", you will get some options to automatically assign lots.

Jim_Harman

@CaliQkn The preference you show applies to all securities in an account. That might be OK for some accounts, such as IRAs, where you don't care about the tax consequences of selling securities inside the account, but in a taxable account you might want different choices for different securities.

For example, when selling an ETF I want to be able to select the lots to sell, but the lots make no difference when selling a money market fund so it might as well default to FIFO.

Another example is when you hold the same security in both taxable and tax deferred accounts. In that case, I want to be able to select the lots in the taxable account but have it always use FIFO in the tax deferred account.

So it seems it would be best to have a holding-by-holding selection, which might be difficult to implement.

[Deleted User]

@Jim_Harman good points but it seemed like the OP was looking for an automatic account level option for lot selection which Quicken already offers.

Chris_QPW

I agree with @CaliQkn that @dburk said "for this account", so the current preferences seem to apply.

On the other hand, as @Jim_Harman said, that might not be "enough". Is there another suggestion that is stating that? If note either this one needs to be better qualified (and in the actually request not in the thread like seems to happen sometimes and then get buried).

I do find it interesting that if you have Automatic transaction entry mode on you have more choices than if you don't. And that the fact for Automatic transaction entry mode it spells out the two choices, but when that is off you have to somewhat guess what Quicken is going to do.

In all I suggest someone creating a much more detailed explanation of what is needed. And furthermore, I suggest that even the current selections for Automatic entry mode are "enough".

They should be the same as in the lot selection dialog:

q_lurker

@dburk

When faced with that prompt, which are you selecting - Average Cost, Specify Lot, or just closing the prompt window?

What security types (in Quicken) are you selling - Mutual Funds or Stocks, etc.?

If you are selling securities with Type = Mutual Fund, in the security details for that security, do you have it checked to Use Average Cost?

In a post from 2022, another user commented that selecting Average Cost for that prompt always cycled through a time-consuming recalculation even though they thought they were already set that way via the security detail. Is that what you are seeing?

In my opinion, the prompt should not ask about using average cost. If a mutual fund is being sold, the setting under the security detail should be used. If something other than a mutual fund is being sold, the average cost option should not be applicable. (The IRS does seem to now allow use of the average cost method for DRIP programs, but that would be too limited (IMO) for Quicken to implement.)

I am not currently able to generate that prompt effectively enough for thorough testing but i do think just closing the prompt window is frequently the best option. If need be, one can come back later and correct the lot specification.

tjlee089

What would help me is an option to choose "average cost" by default for the entire account, since it is a broker managed account. The broker uses average cost for tax statements (taxable accounts), so what I do in Quicken doesn't matter. It would just save me time, especially in IRA accounts where it really doesn't matter.

Chris_QPW

@tjlee089 if it doesn't really matter you might be happier with switching to Simple investment mode. That mode just tracks the number of shares in the securities and the cash balance. That is if you are using the Quicken data for taxes, which I'm guessing is the case.

dburk

To emphasize my point (and maybe make more sense), I have a ROTH IRA where cost averaging or lot selection is irrelevant (I think, please tell me if I'm wrong). It's managed by a broker who obviously doesn't do any tax reporting at this point. At any given time, they may buy and sell 20-30 different stocks. I try to "Accept All" but it stops me and says the equivalent of "Go scroll through all the transactions and find the "Sell" ones and tell it whether it should use cost averaging or lot selection." It takes a really long time, especially in light of my very fast machine, and it's ultimately irrelevant at least for retirement-type accounts. I would like the option to say "for this specific account, please do it this way and don't ask me again." I could go for a coffee (or two) when a group of these transactions come through, that's how slow the processing is, and that's not taking into account (sorry!) what I have to do when there's a sale.

If someone knows that there's already an option to do this (or not) account by account, I'd love to know!

[Deleted User]

@dburk do you have your Securities coded for "Use Average Cost?

dburk

@CaliQkn I don't have that set. Would you point me to where I set that?

Ultimately, the goal would be to set it universally for all assets in a retirement account. I would think we solved this issue if you could set the result by account (if you wanted to), OR by security by account, OR (really last choice) by security. The trouble with doing it for a security across all accounts is that the same security might be treated differently in a retirement account (where I really don't care) and one or more other accounts, where there may be different treatments. I'm just trying to figure out how to make the prompt go away for retirement accounts. It's not needed. Unless there are any accounting-type folks out there who would tell me you can't do the way I'm trying to do it.

[Deleted User]

@dburk you are right that the security might be in multiple accounts. But it sounds like most if not all of your investment accounts are using average cost? Even so, what really matters is what securities are in your taxable account.

To set a security to use Average Cost, go to your Security List (Ctrl+Y) and right click on the security name and select "Edit". In the "Edit Security Details" window, the "Use Average Cost" checkbox is towards the bottom.

Note that this Use Average Cost option is only available for the fund type Mutual Fund.

dburk

Thanks for giving me the directions to this. Ultimately, the thing that takes lots of unnecessary time is when the stocks (not mutual funds) in my retirement accounts—and there are a lot of individual stocks—are sold. I get the prompt each time about what I want to do. What's crazier is that I'm asked the question:

1. Even when 100% of the shares in the account are sold.
2. Even when it's in a retirement account, and it doesn't matter (this is mostly what my original post was about).
3. Even when 100% of that stock in my portfolio was purchased with a single transaction.

I suspect someone at Quicken needs to see the issue I've laid out and maybe someday decide it's worth addressing…Maybe?

[Deleted User]

@dburk When you read about using the average cost method for stocks, most references will say it's not allowed except for DRIP funds. Some mention only Mutual Funds and ETFs but are silent on stocks. I can understand why Quicken is reluctant to commit to allowing automated Average Cost for stocks. It seems like it's a case by case determination that needs to be confirmed by the seller.