"Retrieve Transactions" booking splits using TXIN & TXOUT

[modelerMike]

FM’s “Retrieve Transactions” loaded some stock split transactions from Vanguard Brokerage as TXIN & TXOUT transactions.
An added complication was that there were transactions involving 1 for 4 reverse splits where the resulting fractional shares
were dealt with by Vanguard as ‘cash in lieu’ transactions.
For example if a pre-split position was 13 shares, then a 1 for 4 reverse split would result in 3.25 shares.
In this case Vanguard gave me 3 shares post-split plus the residual 0.25 shares in cash in a ‘cash in lieu’ TXIN transaction
eight business days after the reserve split was booked using the price as of the split date.

Now I know you are not a tax professional but it seems to me that these transactions need to managed thusly;
On the split date book these transactions as a split using FM’s “SPLIT” transaction and then on the later
‘cash in lieu’ transaction date simply book that as a sale of the fractional shares.
This allows FM to know that a split occurred so the ‘View / Split Adjusted” FM functionality can work correctly which I assume
would not work correctly if these split transactions had been loaded as originally loaded as TXIN & TXOUT transactions.
At one point I thought the cash might be a ‘return of principal’ transaction but a moment’s thought led me to believe that is wrong.

The way the transaction was ‘retrieved’ from Vanguard was as follows as per the example above of 13 shares pre-split:
Split day; TXIN 3 shares
TXOUT 13 shares

Eight business days later;

Cash in lieu transaction reflecting value of 1 pre-split share at the pre-split price on the split date
which reflects the post-split 0.25 fractional share not provided in shares.


FM also booked a 5 for 1 stock split on 100 shares ( pre-split ) from Vanguard Brokerage as follows from a “Retrieve Transactions” load:
a TXIN transaction of 400 shares ; creating a position of 500 shares post-split.
Here again I suspect that this needs to be made into a SPLIT transaction in order for FM to know a SPLIT has occurred on this security.


Do you agree or was there something I missed.
Guidance appreciated.

[Mark]

Hi modelerMike,

I agree with your plan. Recording these as a split and sell of the partial shares is more accurate. It is not that unusual that splits are reported in a way like this where you are just given some shares, instead of it being recorded as a split. In these cases, it is best to delete the given shares, and record it as a split.

[modelerMike]

Thank you for the timely and informative reply Mark.

Good day.