Converting Vanguard Shares

I feel like I'm talk When we converted your Investor Shares to Admiral Shares, Vanguard treats the conversion as a non-taxable event. Subsequently, there will be no capital gains or losses associated with the fund conversion.

If you choose to download the transactions, they?ll automatically appear in the associated accounts, depending on how you track your Vanguard accounts in Quicken. If you track your accounts by the account number only, it will appear as a new fund in the account and Quicken will prompt you to add it to the security list. If you track your accounts by fund and account number, you?ll have to create a new account in Quicken to track the newly created Admiral Shares account. Your Investor Share account balance will be reduced to zero.

If you choose to manually enter the conversion, please enter it as shown below.

Quicken doesn't currently contain a specific investment transaction for share class conversions, but the Corporate Acquisition (stock for stock) transaction will handle a class conversion. The corporate acquisition will maintain an accurate cost basis for the new share class.

1. Open the account in question and click Enter Transactions.
2. In the Enter Transaction drop down menu, choose Corporate Acquisition (stock for stock).
3. Complete the form using the following information: a. Company Acquired - Enter your original share class. b. Acquiring Company - Enter your new share class. c. New Shares Issued Per Old Share - Enter the number of new share class shares received for each original share class share. If you are unsure of the number to enter here, please check your Transaction History online, or reply to this message. Please specify the date, fund, and account number for your Admiral conversion. d. Price Per Share for Acquiring Company - Enter the closing price of the new share class on the date of conversion.
4. Click Enter/Done.

The Quicken forum also offers advice on this subject.

And be advised: the Corporate Acquisition pseudo-transaction will "acquire" every share you own of the "acquired" company in every Quicken account where you own that "company". If some of your shares qualify for conversion to Admiral and some do not, the Corporate Acquisition transaction may provide a less satisfying benefit. [You can delete any unwanted "acquisition" transactions; it's just more work.]

Don,

As described above, that's exactly right - it's a corporate acquisition. Done correctly Quicken will properly figure that there's no tax implications.

Now, as Mr. Pollard correctly points out, Quicken will exchange all the Investor Shares for Admiral Shares. This works out just fine if you have but one Quicken account that has the Investor Shares. However, if you have multiple Vanguard accounts (IRA, 401K, one in your spouse's name, etc.) that don't have any such conversion going on, you'll find that those accounts got converted, too.

The solution, while a taking a little time, is simple: After the exchange is performed, go to the accounts where the exchange shouldn't have happened and delete the extra transactions.

You're welcome.

Oh, yeah: The Admiral shares are cool, you get a slightly better rate of return on them. However, if you end up violating the terms of the Admiral shares (less invested in them because of shifting things around, etc.), they'll end up being involuntarily exchanged to Investor shares again.

In this case, you do another corporate acquisition, but this time in the opposite direction. That works, too.

Been there, done that, got the tee shirts.

Good luck.

Ken Becker