How should I categorize money received in lieu of fractional shares?
Short term capital gain?
I am using Quicken for Mac Classic Premier Version 8.5.2
Delete any "money received" transaction and record the split as receiving both full and fractional shares … then sell the fractional shares.
Many brokerages don't download the transaction properly … so you might need to delete a "Shares Added" also as they're really the split shares received.
BTW, since I'm on QWin, those actions might not be available in QMac … but they should be.
If the fractional shares were due to a split, then that would work out fine. If they were due to a merger or spin-off, and you had held the original shares for more than a year, then I'm not sure you'd want to do it that way - I think that would cause the gains to be reported as short term when they should be long term. I think instead you'd want to figure out how much of the original stock ended up being turned into the fractional shares and sell that instead.
Of course, if you don't care about keeping long-term & short term cap gains separated in Quicken then you don't need to worry about that.
@Jon Are you saying that in QMac, shares received from a capital action (such as a split/merger/spin-off) don't carry forward the proportional basis of the original holding?
I'd consider that a major accounting error and a bug. In QWin, the short/long term nature of the fractional shares would depend upon the nature of the original holding … the fraction received would NOT be short-term solely based upon the date received.
@NotACPA Quicken Mac has a stock split transaction, so the original purchase date carries forward through the split. But Quicken Mac doesn't have any built-in transactions for mergers or spinoffs, so you're just adding & removing shares and the new shares have no connection to the old ones.
However, when adding shares you can set the "Date Acquired" field of the new shares to be the date you originally purchased the old shares and then when you sell them the tax report will correctly show the gains as short or long term based on that date, and not the date the shares were added to the account. So it's possible to get it to come out right without having to do what I said in my previous post.
The only downside is that if you have a mix of short & long term gains, at a minimum you'd have to figure out the appropriate number of shares of each and have two transactions - one with a date less than a year ago and one more than a year ago. Either that or go through and figure out each lot individually.
Comcast, which I hold, recently spun-off Versant Media. In QWin, I used a "Return of Capital" and then a BUY … but I'm re-investigating that because I don't think the actions I originally used produce the correct tax results.
Fortunately, all Comcast shares were long term, so I don't have to worry about the short/long term issue.
After re-visiting the prior transactions, and Fidelity's statement for January, I did the following:
@Jon does QMac have a Shares Transferred action to transfer shares from one account to another?
@mshiggins Sort of. When entering a new transaction you can select "Transfer Shares" as a transaction type, but it ends up entering a Remove Shares transaction in the origin account and one or more Add Shares transactions in the destination account. When you're done there's no "Transfer Shares" transaction anywhere, but each Remove and Add transaction has a comment in the Memo field explaining that the shares are being moved to/from another account so there's a breadcrumb trail.
The benefit to this is there will be one Add Shares transaction for each lot so your cost basis is preserved, which is a lot easier than trying to figure that out yourself. There's also an option for "All Securities" if you're transferring the entire account.
@Jon the Shares Transferred works the same on the QWin side - one Remove and an Add for each lot.
You can use the Transfer Shares to create all the lot Adds for a corporate action, just do the Transfer Shares in the first account then repeat in the destination account to have the Add lots sent back to the first account. Generally some transaction editing still needed, but easier than creating all the Adds one by one.
