Cost basis from transfer-between is FIFO not SpecLots?

[pccnavy]

Hi!
I'm evaluating this software and am loving it so far. I'm a novice, but long-time, investor that thanks to your software I'm actually understanding the impact of cost basis. Thanks!

I have the following question:
One of my stocks was aquired by its parent holding company and so it gets a new symbol, price, # of shares, etc.
Because of the way it was executed, I am doing 2 transfer-between transactions and selecting "specify lots". (The certificate and dividend reinvestment shares were transferred on different dates)
I proceed to specify the lots for both transfers, and the 2nd transaction, the certificate, has only 1 lot, so it's CB value matches fine on the transfer-in and transfer-out transactions.
The transfer-out transaction for the dividend reinvestments shows a FIFO CB of "X" and a Specify Lots CB of "Y". But when I look at the cooresponding transfer-in transaction, it shows the CB for the FIFO value, not the specify lots value that I had expected.
Am I simply showing my novice-ness here?

Thanks for any clarification!

[Mark]

Hi pccnavy,

Thanks for trying Fund Manager. Are you sure you selected "Specify Lots" as the accounting method during both transfer between wizards? If so, maybe you can email me the 2 investments in question, and I can take a closer look.

Also, you may prefer an alternate way of recording this. Usually it is easier to just record a split with a ratio of <new_shares> for <old_shares>, and then rename the investment in the properties dialog. I'm guessing you decided against this because the shares were converted on different dates? If so, you could do it as 2 splits. Anyway, just an idea...

[pccnavy]

Hi Mark,

Thanks for your prompt reply. I am selecting "spec lots" when I make the transfer-between transactions. I've deleted the transactions and prices generated and recreated them a few times.
I don't think your solution offered is necessary as I believe I can simply enter the value of the spec lots CB from the transfer out transaction and overwrite the transfer in CB. I'll keep playing more with it tonight to see if I get any different results.
I guess I want to confirm my assumption of what I expect FM to do: that upon selecting a CB method during generating the transfer-between transaction, that it should be using the resulting value of that CB when populating the transfer in CB field.
Your web email does not have a attachment capability, so I will need an email address or other option.

Thanks!

[Mark]

Hi pccnavy,

The accounting method CB in the transfer wizard is only used to determine which shares remain available for transfer as of the date of the transfer. For the shares available to be transferred, they are transferred out using a first in first out method.

I looked at the online documentation for this wizard, and the explanation was not very complete in describing this. I've updated the description for "Accounting Method" in this dialog to read:

The accounting method to use when determining which shares are transferred from the "Source" investment. The accounting method determines which shares have already been sold. Un-sold shares are transferred out using a first in first out method. The transferred out shares determine the tax cost basis value and date and also the out of pocket (OOP) cost for the transferred in shares. The total transferred out tax and OOP basis is equal to the total transferred in tax and OOP basis.

You can see this updated topic online here:

http://www.fundmanagersoftware.com/help ... r_btw.html

[pccnavy]

Hi Mark,

I may have answered my own question, but I would like your feedback on one or two things.
1.) I realized that when generating the txfr-between transaction and specifying lots, that it doesn't prompt me to specify those lots at the time it's creating the transaction(s). After the two transactions are generated by the xfer-between wizard, I then specify those lots, changing my CB info. Since that CB value is not available at the time the transactions are generated, it would make sense that it would default to the FIFO value.
In other words, I would expect that selecting the "Spec Lots" method when creating a xfer-between transaction, would at that time prompt me to specify the lots that way it can generate the appropriate CB value to put in the xfer-in transaction. Or, when I do specify the lots, does it update the xfer-in transaction then? that's cool.

2.) This might be a tiny bug: The xfer-out transaction has been generated and I've specified my lots and there is a value in the "Spec Lot" field. I view the xfer-out transaction making no changes and then click "OK" to close the window and the lots are wiped out. I immediately re-open the xfer-out transaction and now there is a "N/A" in spec lots and the spec lots window reflects. So, I repopulate my lots and I'm back in business, but are easily wiped out by simply clicking "OK". This is very reproduceable. Not a big deal, I just have to remember to click cancel or something other than "OK".

Thanks again!!

[pccnavy]

Hi mark,

Sorry, I hadn't read your reply when I posted. I'll digest your repsponse. The problem this company has caused for me is that my shares were basically transferred in LIFO fashion.

Thanks again for being so responsive.

[pccnavy]

Hi Mark,

I'll close this thread now... Simple misunderstandings:

1.) Spec Lots specifies which lots HAVE been sold, not what is TO BE sold. duh. So, the "bug" I mentioned makes sense now. By clicking OK, FM is resetting the transaction, so I'd have to specify again. Makes sense to me.
2.) the cost graph is showing the OOP CB. (I kept reading it, but it still didn't "click")

I solved my problem by deleting the first purchase transaction, transferring all the other shares, then specifying they were sold, then re-entering in the first purchase and transferring that one too. Did a test sell and all CB's seems to jive.

Thanks for your patience!

[Mark]

Hi pccnavy,

Excellent, glad everything is straightened out. Thanks for bringing this up, the documentation wasn't very clear on this topic.