Schwab import misclassification

[YaanG]

When doing an Internet Retrieve from Schwab, Foreign Tax Paid transactions are being classified as Cash account transactions by Fund Manager. Can someone at FM check into this?

[Mark]

Hi YaanG,

If you had Foreign Tax paid, you will probably see a negative "Foreign Tax" distribution in the investment that paid the taxes, and then a sell transaction in your default cash account for the same amount. If something else is happening, please let me know specifically what. You may also send us an email, and include your log files from the transaction retrieve. For help finding your log files, please read the bottom of this page:

http://www.fundmanagersoftware.com/tintrtv.html

[YaanG]

Hi Mark,

there is no entry under Foreign Tax in the investment- that's what alerted me to the problem.
Do you want all three forms of the log file?

[Mark]

Hi YaanG,

Yes, please send all 3 log files. Also, let me know the details of what actually happened, and what you see recorded in Fund Manager. For example, mutual fund XYZ paid some amount in foreign tax, and what sort of transactions were recorded in FM, in which investments.

[YaanG]

Hi Mark,

please check yr inbox for the log files.

-Yaan

[Mark]

Hi YaanG,

Thanks for the log files. I see the same issue. For some reason your broker is reporting these foreign taxes as "investment banking" transactions instead of as investment transactions. For example, here is how a foreign tax paid is showing up from your broker:

Code: Select all

- INVBANKTRAN
   - STMTTRN
      - TRNTYPE (DEBIT)
      - DTPOSTED (20100208120000)
      - DTAVAIL (20100208120000)
      - TRNAMT (-69.10)
      - FITID (******)
      - NAME (BANCO SANTANDER SA ADR FSPONSORE)
      - MEMO (BANCO SANTANDER SA ADR FSPONSORED ADR)
   - SUBACCTFUND (CASH)

instead of a regular investment transaction associated with an investment:

Code: Select all

- INCOME
   - INVTRAN
      - FITID (******)
      - DTTRADE (20100226153410)
      - MEMO (FOREIGN TAX WITHHELD)
   - SECID
      - UNIQUEID (13642L100)
      - UNIQUEIDTYPE (CUSIP)
   - INCOMETYPE (DIV)
   - TOTAL (-5.79)
   - SUBACCTSEC (MARGIN)
   - SUBACCTFUND (MARGIN)

In the first case, these will go into your default cash account. The investment banking transactions are not specified against a particular investment, they are just showing transactions in a cash account. The better method for a broker to report this is to show the actual transaction associated with a particular investment. Until your broker improves this, you'll have to manually fix these. You might want to contact Schwab and point out this problem, maybe they will take a look at it. If you don't manually fix these, your balances will still all be correct, it is just that you won't have fee/taxes recorded as negative distributions in the associated investment, giving you slightly higher returns on those investments and your overall portfolio. Instead of a fee paid on an investment, it is the same as if you took cash out of your portfolio, which is different from a performance point of view.