entering re-investments


Hi
In 2005 version, I've just noticed something . . . When I enter re-invested dividends I sometimes only put the quantity of shares and sometimes I extend the amount using the per share re-invest price. The cost-basis changes for each of these habits. Which way should I be doing it ?
Thx Alex C
Reply to
Alex Carruthers

Enter the exact number of shares purchased and the exact amount paid; allow Quicken to compute the price/share. (Also for Buy transactions).
Reply to
John Pollard

I didn't buy shares, it's a dividend of a number of shares. And I'm told the re-invest price per share. It's the effect on cost basis that concerns me.
Alex C
Reply to
Alex Carruthers

"Alex Carruthers" wrote in news:vsvDf.373647$2k.323911@pd7tw1no:
As far as the IRS is concerned, you received a dividend of $X and bought Y shares. The cost basis of your original holding doesn't change. You have a new lot of Y shares bought at $X/Y per share.
For example, on some date you bought 100 shares of XYZ for $90/share
On 15 January they paid a dividend of $.20/share or $20. On that day XYZ closed at 95.25/share. You received 20/95.25 or .2099 shares. You now own 2 lots. 100 @ 95 and .2099 @ 95.25.
Reply to
Porter Smith

You received a number of shares that had some value per share. It therefore had a total $ value (# shares x NAV). The total value is what is important, here. *That* is added to the cost basis since you will be paying taxes on this.
The point that John was making is that the cost per share that was reported is almost certainly rounded off from the actual cost. Most of the time they round off to, for example, 3 or 4 decimal places. In actuality, though, they track it in 5,6 or more decimal paces. This means that if you multiply the number of shares by the cost per share as reported, you will be over or under calculating the total value.
If you have the total value of the reinvestment, then enter the number of shares and the total value and let Q calculate the NAV. If all you have is the number and NAV, then enter them and accept the total value. If you can figure it out later, re-enter the data to get the *right* value.
Really, though, if you look at the overall picture, I doubt that either way will make much of a difference. The difference in cost basis is going to be so small that the tax consequences (and *that* is what is important) will be small or non-existent....
Reply to
Hank Arnold

OK, I follow what's being said. In applying a little thought (I'm not an acccounting type) it seems that I 'must' tell Q the re-invested price to enable the cost basis to be adjusted and therefore the gain in value to be correct.
The info I'm fed consists of number of shares to three places and re-invested price to four places.
Thx for your feedback.
Alex C
Reply to
Alex Carruthers

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