Mutual Fund Conversion

toddwc

I tried processing a Mutual Fund Conversion this weekend - something I've done successfully before - and the cost basis is calculating incorrectly for the new holdings. In short, every single purchase over time (monthly purchases, dividend reinvestments, capital gain reinvestments) are all being done at the full cost basis of the account regardless of the number of shares for the specific transaction. Ie. the cost basis isn't being calculated individually for each transaction based on the number of shares and historic purchase prices. As a result, the total cost basis ends up being over $1MM because each small transaction (100+) is valued at over $11K! (the full cost basis on the account). Is this a known glitch? I converted a different mutual fund for the same MF company just 2 weeks ago and it worked fine. Would appreciate any tips. Thanks.

Jim_Harman

You have encountered a longstanding problem with the Mutual Fund Conversion.

As reported below and elsewhere, the Mutual Fund conversion function is broken if there is more than one tax lot in the original holding and the security is set to "Use average cost".

In QWin Subscription R22.12, I tried a mutual fund conversion on a test file and found the following:

-- If the current holding IS NOT set to "Use average cost" the conversion works correctly and preserves the original cost basis of each lot and thus the total cost basis.

-- If the current holding IS set to "Use average cost" the market value for the new holding is computed correctly but the cost basis is incorrect. As @tapeterson reports, it sets the cost basis for EACH LOT of the new holding to the TOTAL cost basis of the original holding. In my test case there were 15 lots, so the total cost basis after conversion is 15 TIMES what it should be.

https://community.quicken.com/discussion/7858412/mutual-fund-conversion-erroneous-cost-basis

To recover from this, you can delete the Removed transaction and the erroneous Adds. Then click on the name of the old security in the Security List to open the Security detail view. If Use average cost is selected, un-check it. Then repeat the Mutual Fund Conversion.

Jim_Harman

You have encountered a longstanding problem with the Mutual Fund Conversion.

As reported below and elsewhere, the Mutual Fund conversion function is broken if there is more than one tax lot in the original holding and the security is set to "Use average cost".

In QWin Subscription R22.12, I tried a mutual fund conversion on a test file and found the following:

-- If the current holding IS NOT set to "Use average cost" the conversion works correctly and preserves the original cost basis of each lot and thus the total cost basis.

-- If the current holding IS set to "Use average cost" the market value for the new holding is computed correctly but the cost basis is incorrect. As @tapeterson reports, it sets the cost basis for EACH LOT of the new holding to the TOTAL cost basis of the original holding. In my test case there were 15 lots, so the total cost basis after conversion is 15 TIMES what it should be.

https://community.quicken.com/discussion/7858412/mutual-fund-conversion-erroneous-cost-basis

To recover from this, you can delete the Removed transaction and the erroneous Adds. Then click on the name of the old security in the Security List to open the Security detail view. If Use average cost is selected, un-check it. Then repeat the Mutual Fund Conversion.

toddwc

You Rock Jim!! Switching off average cost basis and trying again did the trick. Much appreciated!!