How do I account for cost of dividend reinvestment?
Options
OTTBMom
Member ✭✭
I have a stock account with a company that charges me a fee for each transaction. So when I get a dividend, even though it's reinvested, they deduct a portion for that cost.
And example: Stock A declares a dividend, and the total I get is $100. But the brokerage keeps $5 for doing the transaction, so I actually only get $95 reinvested -- even though I will have to pay tax on the total dividend of $100. What I find in Quicken is that I can never get the stock price to come out right, because I can only ADD the $5 as a commission.
This (expletive deleted) brokerage also does not allow me to download transactions, so I have to enter them manually. My problem in Quicken is that I can't seem to get that $5 accounted for as a deduction. If I put it in as a commission, the total goes to $105 which of course impacts the price at which the dividend was reinvested. How can I do this properly? Currently I've got the stock set up as just a regular brokerage account with a single "mutual fund" which or course in my case is a stock. Thanks for any help anyone can provide.
And example: Stock A declares a dividend, and the total I get is $100. But the brokerage keeps $5 for doing the transaction, so I actually only get $95 reinvested -- even though I will have to pay tax on the total dividend of $100. What I find in Quicken is that I can never get the stock price to come out right, because I can only ADD the $5 as a commission.
This (expletive deleted) brokerage also does not allow me to download transactions, so I have to enter them manually. My problem in Quicken is that I can't seem to get that $5 accounted for as a deduction. If I put it in as a commission, the total goes to $105 which of course impacts the price at which the dividend was reinvested. How can I do this properly? Currently I've got the stock set up as just a regular brokerage account with a single "mutual fund" which or course in my case is a stock. Thanks for any help anyone can provide.
0
Comments
-
I think you need three transactions for each of these dividend events:
- A transaction of type Income>Dividend for $100 which will put a (temporary) cash balance in the register
- A BUY transaction showing purchase of $95 worth of the security (leave $5 cash in the account)
- A PAYMENT/DEPOSIT transaction for $5 with category of Investment Expense or Brokerage Fee or whatever you want to use (leaving $0 cash balance in the account).
Now I have to ask… isn't there any way you can move this account to one of the low cost brokerage firms like Fidelity, Vanguard or Schwab?
Quicken Mac Subscription; Quicken Mac user since the early 90s0 -
An alternate approach:
Use the Reinvested Dividebd transaction.
Enter $95 as the Dividend.
nter $5 as Commision.
The $5 Commiion adds to the Cost Basis and results in a tax advantage of resucd capital gains on future sale,
QWin & QMac (Deluxe) Subscription
Quicken user since 19911
This discussion has been closed.