Tax Basis of Trading Fees on DRIP Reinvested Dividends

What is the best way to record the transaction fees that some Dividend Reinvestment Plans (DRIPs) charge when dividends are reinvested so that I can track my tax basis when I sell the shares? I suspect the same issues would arise a "load" mutual fund.

An example may help frame the question. My apologies for the length of the email. To the extent it matters, I'm using 2010 Quicken Premier version R10.

Example -- Assume a monthly $100 investment in the Home Depot DRIP whose statements reflect that a $2.50 "investor paid" trading fee has been deducted from each monthly investment.

If my statement reflected a purchase of 2.7583 shares of Home Depot, my Quicken transaction would be "Buy Shares" reflecting 2.7583 shares purchased, $2.50 "commission", and $100 total investment, resulting in a $36.072943 price per share. ($99.50/2.7583) My basis for the

2.7583 shares is still $100, as I treat the $2.50 as I would a Merrill Lynch or E-Trade commission.

But, if instead of purchasing a $100 of Home Depot stock, I reinvested a $100 dividend. I have been using the "Reinvestment" screen which is where I think I have a problem.

My reinvestment entries would be for $100 as the Amount and 2.7583 as the number of shares. The conundrum is what to do with Home Depot's $2.50 fee?

Recording it as a $2.50 commission bumps the transaction total to $102.50, which seems inaccurate in several respects: (i) Quicken creates a $2.50 "Miscellaneous Income" entry for my "commission" expense, (ii) Quicken bumps my purchase price per share to $36.254215 ($100/2.7583). But Quicken does reflect the anticipated additional $100 of basis.

Recording it as a negative ($2.50) commission drops the transaction total to $97.50 (my net reinvested dividend), but my basis still reflects the anticipated additional $100 of basis. My price per share remains $36.254215 ($100/2.7583), leading me to conclude that Quicken ignores the commission entry on the Reinvestment screen in calculating basis and price per share.

Running the Investment Transaction Report nets the $2.50 commisssion on the purchased shares with the ($2.50) commission on the reinvested shares, totalling $0 instead of the anticipated $5.

Recording the Amount as the net $97.50, 2.7583 shares and a $2.50 commission results in a $100 transaction total, a $97.50 basis and a $36.072943 price per share.

Deconstructing the transaction into a separate "Income" transaction to reflect the dividend distribution, followed by a Buy 2.7583 shares, pay a $2.50 commission out of the $100 received appears to generate the correct $100 income and $100 basis.

I think I have answered my question, but I'll ask anyway -- Am I missing something? Or do we have a situation?

Thanx for any insights or suggestions.

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dave
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