Transfer from Mutual to Mutual

If I understand your situation, this is a tax free conversion from one security to another. If so, this happened to me once and it was quite annoying because you want to preserve the original purchase dates for capital gains computations.

This is what I did. I used the stock split to change the number of shares and share price to the new security (it seemed to work perfectly). This will not work if you already use the new security. Then I changed the ticker for the old security to match the new so prices would update correctly.

Maybe there is a better way that also preserves the buy dates for the holding periods, but I don't know what it is.

Peter

Thanks Peter, Your method sounds good. I'll give it a try. Jimt

Enter it as a Corporate Acquisition. This will preserve your cost basis for you.

I found "Corporate Acquisition" in the Quicken (2005 H&B) help, but when I follow the instructions, I don't find it as an option in the "Enter Transactions." Does this only work with some types of investment accounts?

Peter

Assuming we're talking about the US version, which I do not think Fred has, the answer to your question is; yes, not all investment accounts can utilize a corporate acquisition. In my quick test, I actually only found one account type that could not: Single Mutual Fund accounts do not have the option to do a Corporate Acquisition.

Understandable probably, from a technical point of view; the rules say a Single Mutual Fund account can only contain transactions for a single security, and that security's name is established at the time you create the account, or at least, at the time you enter the first transaction containing a security name.

One more reason to avoid Single Mutual Fund accounts, in my opinion.

Hi Fred, I have been looking at the Corporate Acquisition transaction and have a couple of questions. How do I calculate what amount to put in the "new shares issued" entry? (Example my old mutual had 3500 shares at $25 per share and the new mutual has 4800 shares at $20.25 per share.) Using this example, I put in 1300 shares and the new price of $20.25 and the amount of shares ended up way, way off. Second, once this transaction is complete, will it show the old mutual name, data, etc. until this transaction date? Thanks, Jimt

After looking at it for a while, it looks like I should divide the new amount of shares (4800) by the old amount (3500) and use the product as the "new shares issued" entry. Am I heading in the right direction here? Thanks, Jimt

You're on the right track. The Corporate Acquisition action was designed for takeovers, where the acquiring company would offer, say, 1.5 of their shares for each share of the company being bought.

In your case, enter 1.371429 shares issued per held share, at a price of $20.25. Hopefully, this will give you exactly the right number of shares in the new fund. If not, you might have to enter an adjustment, because you will want to have the exact same quantity as on your statement.

Finally, John is right, I use the Canadian version of Quicken, which could be different from yours, but hopefully not.

Actually, I was only addressing the other poster who's situation seemed to be affected by conditions that I though more likely (though still not *very* likely) to be different in non-US versions. And I was also interested in the other poster's point because I had not realized it before myself.

Hope it didn't seem I was stepping on your toes; not my intention.

No offense taken, John. I completely agree it's best to be as complete as possible with responses in case it has a bearing on the poster's problem.

Keep up the good work.

I gather from your new signature you've moved from BellSouth (I believe it was)?

Thank you.

Yes. Not that Bellsouth was so great, but I moved 3 miles down the road and while BellSouth is still my (only choice for my) phone company ... they don't have DSL here. They have it 3 miles to the east and 1 mile to the west, but not here. I decided to try the local cable company; bad choice. Only other option was satellite; not good in thunderstorm/hurricane country I think.

That makes sense.

Thanks, Peter

To continue the hijacking of this thread (and to completely confuse those trying to follow the conversation because I like to top post while you like to bottom post), I had the same problem. But my switch to the cable company wasn't as traumatic as yours, so I've stuck with them.