QD2010 investment fee

I'm trying to clean up some transactions in my wife's 403b Roth account. Periodically, there are small fees that take pennies out of the account positions and also reduce the share holdings fractionally.

I've been putting these in as MiscExp... but just realized I have no way to reduce the share holdings this way.

What's the best way to handle this routine occurence? Just do an Adjust Share Balance when the fees hit? Remove shares?

What would you suggest?

Reply to
speedlever
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Bartt Shelton wrote in news: snipped-for-privacy@x23g2000vba.googlegroups.com:

Bartt, thanks for your reply. My AR nature wants me to try it your way. But I'm having trouble envisioning how that shakes out.

If I do a sell by the amount of the fee per security, then I'll have an increase in the fund balance with a corresponding share decrease. When I do the corresponding expense transaction, I'll have a fund decrease back to the original amount, rather than the decreased amount which the fee expense should properly show.

While the share balance would be correct, the account fund balance would be off by the amount of the fee (in a positive direction).

What am I missing?

Reply to
speedlever

You need another transaction for the Fee to record it against a category. A MiscExp type of transaction.

Oilcan

-----Original Message----- From: speedlever [mailto: snipped-for-privacy@NOSPAMyahoo.com] Posted At: Sunday, October 10, 2010 10:00 AM Posted To: alt.comp.software.financial.quicken Conversation: QD2010 investment fee Subject: Re: QD2010 investment fee

Bartt Shelton wrote in news: snipped-for-privacy@x23g2000vba.googlegroups.com:

Bartt, thanks for your reply. My AR nature wants me to try it your way. But I'm having trouble envisioning how that shakes out.

If I do a sell by the amount of the fee per security, then I'll have an increase in the fund balance with a corresponding share decrease. When I do the corresponding expense transaction, I'll have a fund decrease back to the original amount, rather than the decreased amount which the fee expense should properly show.

While the share balance would be correct, the account fund balance would be off by the amount of the fee (in a positive direction).

What am I missing?

Reply to
Oilcan

"Oilcan" wrote in news:000101cb68b1$c9726a90$5c573fb0 $@Domain:

Oilcan,

I'm still missing something.

Here's what I have:

1) A sell transaction per fund which takes care of the fractional stock but records the sale proceeds to the cash balance of the fund. 2) A MiscExp transaction per fund which takes care of the fee and is expensed to Investing fee (category) but leaves the fund balance even instead of minus the cost of the fee.

Does that make sense?

What else do I need to do?

Reply to
speedlever

I think you are ... but it's not clear what it is.

Not sure why you say "*but*" [emphasis added] "records the sale proceeds to the cash balance", because that is just what should happen.

No, it does not make sense.

A "MiscExp" transaction normally removes "cash" from an investment account. It does that in every Quicken account that I expect it to do so.

I think there must be something else about your Quicken account (or perhaps, your Quicken security - though I have no belief in this), that is involved.

Your post seems to make it clear that your Quicken account does not have a linked-checking account. But is that true?

Your post seems to make it clear that your Quicken account is not a Quicken "Single Mutual Fund" account. But is that true?

So far, I can't imagine why your MiscExp transaction would not reduce the cash balance of your investment account.

Reply to
John Pollard

"John Pollard" wrote in news:i8to12$4g3$ snipped-for-privacy@news.eternal-september.org:

Poor choice of words. I should have said, and records the proceeds to the cash balance of the fund.

And it does so. I believe that I just didn't think it through properly.

The fee is covered by the sell and then removed by the MiscExpense. I was thinking I should have a - cash amount due to the fee. I didn't consider that the fee was covered by a corresponding reduction in share quantity.

I believe that all is well and the problem was just my inexperience dealing with investment funds and how investments work with QD2010.

I'm not clear on what this is. The funds Xin as a payroll deduction.

I'm also not clear on what this means. For the record, this is a 403b account with Valic.

It does. I was confused and didn't take into consideration that the cash fee was covered by the reduction in share quantity, leaving the cash balance the same as before the transactions (sell (+) and misc exp (-)).

Thanks for the help all.

Reply to
speedlever

?Hi, Speedlever.

Pardon me for jumping in, but it seems that you have the same kind of blindness that affects me (and just about everybody else) now and then. Something about "the forest and the trees". ;^{

You said, "The fee is covered by the sell..." No, not directly. Cash is generated by the sell - and shares are reduced.

Then you said, "... and then removed by the MiscExpense." Not exactly. The fee is paid from the cash and charged to the MiscExp category.

This SHOULD be the end of the transaction - actually, a compound transaction.

At this point, shares have been reduced; the expense has been increased. And cash has gone up and then down and is back where it started.

If you have cash in multiple pockets in that Quicken Account (Cash Balance plus come other ethereal cash amount), then the sale proceeds may be in one pocket while the fee is paid from another - and that would lead to confusion.

This is the source of the confusion: You didn't hand over shares to cover the fee. You sold shares and used the cash proceeds to pay the fee. There were two transactions, not just one. While it is entirely acceptable - and convenient - to view them as a single transaction, it is important to recognize that there really were two steps. If you don't record the first step - the sale - then you have no place to record the gain or loss on sale of the shares.

An accountant can create a compound entry to record all this, but in Quicken, it's much simpler to record it in two simple entries. An accountant's compound entry might look like this:

Debit: MiscExp $100 Credit: Asset (4 shares @ $20 cost) $80.00 Credit: Gain on Sale 20.00

(Explanation: i used shares that cost me $80 to pay a $100 fee.)

This skips the cash account altogether, ignoring these two steps, which cancel out: Debit: Cash (Proceeds of sale of 4 shares @ $25) $100 Credit: Cash (Used cash to pay fee) $100

This is just my long-winded way of saying the same thing that Oilcan and John have already said. ;^}

RC

Reply to
R. C. White

"R. C. White" wrote in news:DMadnT8HUdwa3i7RnZ2dnUVZ snipped-for-privacy@posted.grandecom:

Ah yes. One of my specialties!

Although I obviously know just enough to be dangerous, I think I understand the finer points that you mention. I guess I was just giving the Cliff Notes version as just enough shares are sold to cover the fee. And from my layman's perspective, shares are sold to generate income to pay the fees... which doesn't affect the cash balance in the fund.. .just the fund value at any given point in time due to the reduction in shares.

Your example is easier to see than it is with the fees I am seeing: $0.06 and 0.0010456 shares. ;-)

Except that I suppose you could complicate it by having to determine which lot you pull shares from to sell. No, I don't think I want to go there.

Interestingly, in the process of cleaning up the account, I discovered that the company had missed one of my wife's transactions. There is a deduction on her paycheck, but there is no record of it in the fund history.

In addition, I discovered another deduction took them over 3 months to process. Very strange. And not exactly comforting that this company can be relied on to take care of business.

I have more accounts to review now... lots of work to keep me busy.

Thanks to all who jumped in to help me understand.

Reply to
speedlever

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