Issues recording the Google Split

[Kempostudent3]

I had some shares of GOOG before it was split on 4-2-14. Ever since then I've been having issues which I think are related to how it split. They gave me one share of GOOGL for each GOOG share, but also cut the price in half.

I recorded the shares of GOOGL as a "Transfer In" Transaction with the Value as half of the original value.

Where I get stuck is recording the split for GOOG. It essentially cut my cost basis for GOOG in half, but I still have the same number of shares, so I'm not sure how to record it.

I've tried adding a fake sell transaction for the original value on that day for all shares, then adding a fake buy transaction for the same number of shares but at half the original value. This seems to "fix" my basis, but I'm still getting a large negative spike on my gain graph (although that may be due to the price data getting cut in half at a slightly earlier date).

To make matters worse, the prices before and after the split are not adjusted, so it messes up yield calculations.

Has anyone figured out how to record this event so that ROI reports and Graphs are not messed up?

Thanks in advance.

[Mark]

Hi Kempostudent3,

Here is how I would suggest recording this: Change the symbol on your existing GOOG shares to GOOGL. Next, record a spin-off in GOOGL for the new child GOOG. The number of GOOG shares would be equal to the number of GOOGL shares you have. Transfer 50% of the original cost basis in the A shares to the new C shares as a tax-free type of spin-off.

[Kempostudent3]

Mark,

I hadn't found that option before you suggested it, but that seems to be exactly what I need to do. It would be nice if the spin-off option was in the pull-down for new transactions. It would have taken me a long time to find it not knowing it was an option.

Unfortunately, I've tried it a few times and an error occurs somewhere in the middle of the process. It creates the new stock but doesn't finish the transfer transaction. I'll have to see if I can find some sort of error log and figure out what's going on when I have more time.

Thanks.

[Kempostudent3]

As follow-up for anyone interested, I still have not been able to get the spin-off feature to complete and record the transfer transactions. I'm not sure if the feature is broken or if something about how I'm inputting it is causing it to malfunction.

I was able to record the event reasonably well in a manner that doesn't seem to mess up the calculations. I added a 2:1 split on that day, then a transfer out transaction on the original (GOOG) and a transfer in transaction on the new (GOOGL). I found that this keeps my cost basis correct (or at least close enough for me).

The only other hiccup was that yahoo finance adjusted their prices a few days before my transaction showed up, so I moved the split transaction back a few days to match their data and now I don't get a spike in the gain graph where the prices are way different. So far everything is looking good and my yield calculations appear reasonable.

I hope this helps someone else in my boat.

-Kempostudent3

[Mark]

Hi Kempostudent3,

What specifically was going wrong with the spin-off wizard? Were you getting an error message?

In this case, the method you described works, since the shares transferred are proportional to the cost basis being transferred.

[Kempostudent3]

I kept getting an error message in a pop up dialog box with an "OK" button that said:

"Errors occurred while recording transfers in child, unable to complete spin-off."

It may be something specific about the price data around that date that's throwing it off. I just tried to recreate the problem to get the error message on a later date with some bogus data on the same stock and it worked.

The only other thing I can think of is that I had the cost basis slightly larger than the market value because the price had dropped since I had originally purchased GOOG.

Either way, I'm ok with my workaround solution since it seems to be working fine.

[Mark]

Hi Kempostudent3,

Okay, thanks for the information. It sounds like you're all set, but if you'd like us to look into this more, please email us the parent investment file, where you were recording the spin-off, and all the entries you used in the spin-off wizard, so we can try to create the problem here. If you don't want to bother, that is fine too, we will try and keep an eye out for this.