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Q Del 2009 stock transfer question

I posted a thesis earlier :) but thought I pull out something and ask a more pointed questions.

In March 2006 (no clue what version of Quicken I was using then) I recharacterized 14 months of Roth IRA contributions to traditional IRA due to my exceeding the Fed guidelines for income. My brokerage statement broke that up into two transfers...all of 2005 as one and the first two contributions in 2006 as the other (kinda, I can't get the math right but I'll assume the brokerage was right...in the long run it's irrelevant), so I did the same in Quicken to keep the records clean.

So in the old account I used the "transfer to new account" transaction type and selected "last in" for lots since it was the last 14 transactions I'd made in error to the wrong account. In the new account that somehow translated to 39 transactions (since the two transfer transactions accounted for 14 contributions, all at probably different share prices, one would expect this to create at most 14 transactions in the new account, not 39), each with the date acquired, a share price, and an amount. One would assume the "amount" would be the cost basis for the shares. Not so sure. For one thing, the dates for 6 of the transactions go back to 2001/2002. Using "Last-in" should not have transferred shares acquired before 2005. Second, no idea why I ended up with 39 transactions from the 14 that transferred (although the total shares came out correct).

Lastly, if I have Quicken gonkulate a cost basis report for the shares that transferred into the new account, I get $4881.85, yet I made 14 contributions of $333.33 ($4666.62). Can't figure out how QUicken and I are off by 220 bucks or so.

If anyone has ideas I'm listening...

Reply to
Roscoe
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I'm not sure I can explain 100% (or any %) of your problem. So what follows are just some notes about what might be involved.

Shares transferred between accounts transfers "lots"; so your number of "contributions" isn't necessarily a good guideline for the count of transactions to expect in the transfer. Each reinvestment, for example, produces a "lot" that may need to be be transferred. Each lot with any shares to transfer, will generate a separate Add Shares transaction in the new account.

I think that as long as you didn't ask to transfer more shares than you owned in the account, the number of shares was bound to come out "correct" ... the same number of shares you told Quicken to transfer. Quicken will use as many lots as it takes to transfer the specified number of shares.

When you are entering a Shares Transferred Between Accounts transaction: if you click the "Specify Lots" button, then elect "First Shares In", you should be able to see exactly which lots (or portions of lots) will be transferred.

I think it was recently discovered that Quicken was not handling the transfer of cost basis correctly in the Shares Transferred Between Accounts pseudo-transaction. I believe the problem was reported by someone using a fairly new version of Quicken, but the problem could have been around for quite a while.

I'm not certain of the details, but I think the problem is caused by Quicken not following its own advice: when it creates the Add Shares transactions in the new account, it computes the cost as the price/share * number-of-shares ... where it should transfer the original cost amount and number-of-shares and compute the transferred price/share.

I believe the problem can be "fixed" by modifying each of the incorrect Add Shares transactions and entering the actual cost amount. Quicken should popup the "Recalculate Investment Transaction" dialog that asks you which of the three factors you want to change ... and you can accept the default of "Average price".

Reply to
John Pollard

I do not think that your cost basis matters. It is all regular income on day of conversion. NOT a Cap Gain OR Loss.

You should always use Total number of shares and Total dollars when entering transactions and let Q calc cost per share. This goes for all transactions - not just IRA. That is probably why there is a slight difference in the calculations you see.

Reply to
Zaidy036

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