"Convert 'shares added' to stock split?" question

EmKay

I've used "shares added" transactions in the past, I'm pretty sure, to handle my Roth Conversions (I have a dummy account set up to receive and then redistribute the conversion). But I only recently started getting a prompt with the title shown in my subject line, that goes on to say,

"Quicken has detected a downloaded 'Shares Added' transaction dated xx/xx/xxxx for xx shares of the security 'xxxx' in the account 'xxxx' which appears to represent a 101:100 stock split. Convert this transaction to a Stock Split transaction for improved reporting accuracy?" The options are "No - never do this," "No," "Yes," and "Yes - always do this."

The prompt does not show me the transaction in question. Why is this happening now (when it has not happened previously)? Why is it detecting these as Stock Splits?

(I understand that the detection is occurring not on a transaction I'm entering manually, but on one being downloaded as "shares added" - which, because this is a Roth Conversion, is correct. I'd actually prefer that it auto-detect these as conversions and handle them correctly without me having to use the dummy account!)

q_lurker

I can't answer the specific Why and Why now questions. Further, I do not exactly understand how you are working your IRA-to-Roth conversions through a dummy account and how that interfaces with downloaded transactions from a financial institution (FI).

I will offer in broader terms, that if Quicken detects Add Shares transactions in an account where you already own shares of the same security, it may see that as a possible stock split. Some FIs have downloaded the impact of a stock split (more shares in the account) as an Added Shares transaction rather than to proper StkSplit transaction. Why those FIs have done it that way baffles me. The recent (?) Quicken routine attempts to detect those inappropriate Add Shares transactions and convert them to StkSplits.

In your case, if Quicken is seeing that you have 200 shares and are adding 2 shares to that (making 202 in total), the routine would be asking if that is in fact a 101:100 split. In your case it is not (as I understand what I think you might be doing), and not likely ever to be, so I would be inclined to take the "No - never do this" approach.

Why are you thinking this should be a StkSplit transaction rather than an Add Shares transaction?

EmKay

@q_lurker - I am not thinking it should be a stock split. I'm wondering why, where I've downloaded Shares Added transactions many times before and have NOT been asked this, and where there are other reasons why shares get added other than stock splits (e.g., Roth conversions), I'm suddenly getting prompted.

q_lurker

Sorry I misunderstood your prior expectation. Again, I am not sure specifically why you are getting this pop-up prompt now other than it is a bit of a new checkpoint in the programming trying to fix an issue with some FIs downloads. I am not at all clear on when this check gets applied (I have not seen it myself).

I'd actually prefer that it auto-detect these as conversions and handle them correctly without me having to use the dummy account!)

The procedure I have used for an IRA-to- Roth conversion has been to

• Sell the shares in the IRA
• Withdraw the cash to a Cash account (I suppose this is equivalent to your dummy account. I find that sort of transfer necessary because the IRA-administrator will issue a 1099-R for the converted amount.)
• Transfer the amount from the Cash account to the Roth IRA account.
• Buy the shares in the Roth account.

So with respect to the real world where the FI reports the shares (or share value) going straight from traditional IRA to Roth IRA, yes, Quicken requires a separate step (or three). Further, it there are tax withholdings held back, those too need to process out of the Cash (dummy) account rather than the traditional IRA account.

Note that there is an Idea in the 'planned' category to improve this type of conversion process:

https://community.quicken.com/discussion/7864626/improve-handling-of-ira-distributions-including-qcds-and-roth-conversions

When and how the improvements might be implemented is unknown.