Transfer portfolio from from ML to Fidelity - how to handle fractional shares

paladin

I'm moving a portfolio of roughly 40 stocks from Merrill Edge to Fidelity account via ACATS (Automated Customer Account Transfer Service) and I see that fractional shares will not be transferred but will instead be sold by Merrill. Having been with Merrill for years, I know that fractional shares can linger a long time before they are sold (sometimes as long as a month on low-volume tickers).

Using one example, I have 141.29 shares of VOO. Rather than using "transfer all shares" I will transfer 141 shares to the Fidelity account (which is already open, btw). Quicken will then show that I hold 0.29 shares at Merrill.

Quicken will likely show a 141 "Shares Removed" transaction in the Merrill Account and then a series of "Shares Added" transactions in the Fidelity account, to account for the cost basis of shares purchased at different times.

As for the 0.29 shares? Rather than wait for the sale, could I create a "sell" transaction on the day of transfer, using the closing price for VOO, and then later, when Merrill sells fractional share, edit the transaction (date, price and total amount)? Also, how will Quicken deal with the sale of the 0.29 shares? Will it default to FIFO?

(Obviously, I will create a backup copy of my pre-transfer file. Using that copy, perhaps I should just see what Quicken does with it.)

Anyway, I'll muddle through it, but I would like to preserve accurate cost basis info for my holdings, and I don't want to overlook something critical, so I welcome any thoughts from the smart folks on this forum.

Thank You!🍎

NotACPA

Are you downloading into Q from ML? From Fidelity?

I'd just wait, and leave the fractions in ML, until the actual sale goes thru. The money, unless you're talking about a fractions share of BRK/A, or somesuch, is trivial and I don't see much benefit in recording it early.

Q should always reflect reality … and until you download the actual sale(s), you still own the fractions.

q_lurker

VOO is (to my knowledge) a high volume ETF. There should be no delay selling those fractional shares. It is possible on some such sales, commission may eat up some of the proceeds.

The key here is to match Quicken to real world (if that is important to you). ML will sell (or set aside) the fractional shares from some specific lot That may be based on FIFO, or minimum gain, some other preset criterion. The other shares will be transferred. But which lot provided the sold fractional shares may not be clear for several days. The initial downloads from ML may not be specific and may not get corrected if adjustments are made.

Quicken will likely show a 141 "Shares Removed" transaction in the Merrill Account and then a series of "Shares Added" transactions in the Fidelity account, to account for the cost basis of shares purchased at different times.

Quicken will only show a series of Add Shares if you execute a Shares Transferred action (Enter Transactions button). The initial download from Fidelity will only show the aggregate 141 shares received. Likely Fidelity will show $0 cost basis until they separately get the detailed by-lot data several days later from ML. When they do get the details, they will not download those to you (in my experience with other FIs).