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Schwab Stock Merger Downloads Incorrectly

Ray

I had a stock merger between Avalonbay and Vivmark. The two transactions on the Schwab website are shown in the top screenshot. I don't recall the type of transaction that Quicken used, but it resulted in Securities Comparison Mismatches shown in the middle screenshot. I changed the transaction types as shown in the bottom screenshot. This cleared the shares mismatches.

I spoke with Quicken support. They escalated it. A higher-level person called me and confirmed that Quicken couldn't process Stock Mergers correctly. I suggested a solution and he said the best way to get it implemented was to post it in the Quicken Community.

The Solution

The process Quicken could implement when the see a stock merger is to enter a Removed transaction if the number of shares is negative and to enter an Added transaction if the number of shares is positive. In both transactions, the name of the security and number of shares needs to be entered.

The wish is for Quicken to have an Action type for Mergers. Either one removes some or all of the original cost basis and applies it to shares (based on merger or spinoff ratio) of another security… along with a cash-in-lieu-of-fractional-shares deposit with partial basis for long- or short-term gain.

[Edited - Added @MontanaKarl suggestion]

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Comments

jacobs

@Ray You posted this in Product Ideas for Quicken Mac, but your screenshots are from Quicken Windows. Which are you wanting to create this Idea for? (We can get a moderator to move it to Quicken Windows if that's the intent.)

Ray

Please move it to Windows. I was too hasty is selecting the category and scrolled into Mac topics.

It should be in the "Download, Add/Update Accounts (Window)."

MontanaKarl

Also, @Ray , once this is where it belongs… you cannot simply remove shares and add shares without accounting for cost basis information - including capital gains for cash received in lieu of fractional shares (which will show in your Schwab transactions along with what you included in your screenshot).

So, your suggested solution isn't correct anyway. Supposedly, you got 2.793 shares of VMRK for each share of Avalonbay which is 103.341 shares total across which your 7,070.57 cost basis would be divided… and you would have received cash for the 0.341 shares resulting in a small capital gain - with the balance of the original cost basis now associated with the 103 shares of VMRK. But, they could have included some return of capital in the merger process… so the cost basis details on the merger info page of the shareholder support website should be reviewed - although I've yet to have Schwab not handle things correctly other than pennies… so you can just review your cost basis info on the Schwab web site as well. It can often take Schwab until the end of the month statement to sort out merger/spinoff/etc cost basis info.

Ray

My suggested change corrects the share balance which is better than what Quicken did. It would be helpful to others if your comment is moved or if you post it again after the move. If you can suggest how to correct the capital gains, that would be even better.

Quicken Laura

Hi @Ray,

Thank you for taking the time to reach out with your request and for sharing your feedback!

I went ahead and changed your post to an Idea so other users who have the same or a similar request can vote on your idea by clicking the up arrow (see below).

Thank you!

q_lurker

In my opinion, Quicken handled the situation correctly.

In such circumstances, I suggest the user use the wizard-type transaction of a Corporate Acquistion; VMRK acquiring AvalonBay as @MontanaKarl outlined. Doing so will properly manage the full effects of the deal setting up for the cash-in-lieu sale.

I have found over the years that downloads from a financial institution in such cases are not reliable, inaccurate, and incomplete. To expect Quicken to make the correct interpretation of such information is unrealistic, in my opinion, thus user action is necessary.

Ray

After accepting Quickens transactions, both securities had incorrect share balances. Quicken is happy after my changes. But @MontanaKarl said I also need to account for cost basis information - including capital gains. He said I might have to wait for the monthly statement.

What transactions are needed to correctly enter the transactions?

If it's not too complicated, I'd appreciate a step-by-step for my example with the transaction needed and where to get the data for each of the transactions.

For filing my income taxes, I use the 1099s provided by Schwab. Many it's not worth the additional effort.

MontanaKarl

Without the correct cost basis (and dates) for each of your holdings, Quicken cannot provide you with any performance information - only a net worth based on total shares and price. If you never use the performance tab, or want capital gains tracked in Quicken, then the cost basis wouldn't matter.

I track everything as a way of monitoring the portfolio. Even so, I only use the Schwab 1099s at tax time.

When you get your monthly Schwab statement, it will show the cost basis for this new holding - and will show the transaction for the cash-in-lieu as well. If you use the Schwab web site, from Portfolio view, you can also click on the blue cost basis entry and a pop-up window will show, for all basis lots (there may be only one), the acquisition date (should be the same as your original Avolonbay holding) and the basis allocated to Vivmark.

For Quicken Windows: Just edit the "Added" transaction for Vivmark… you'll see under the Description column entries for you to enter the 37 shares (which you have), then the cost per share (whatever Schwab says the basis is divided by 37), and the date is the acquisition date of the Avonlonbay. The merger does not change the cost basis date. If there are multiple basis lots at Schwab, then you would do multiple "Added" transactions, one for each lot, totalling the 37 shares.

q_lurker

What transactions are needed to correctly enter the transactions?

Rather than clutter this idea with such detail, I initiated this discussion as how I would handle it:

https://community.quicken.com/discussion/7975880/avalonbay-to-vivmark-acquisition