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Quicken incorrectly calculates the adjustment to the cost basis of lots held when a Return of Capital transaction is processed.

I discovered this bug in November 2016 after selling my holdings of Mainstay Cushing MLP Premier Fund to harvest capital losses. The calculation error occurred in Quicken Premier 2017 and Quicken for Mac 2017. The calculation error still exists in the new Windows and Mac versions of Quicken that was recently released.

When a Return of Capital transaction is processed, Quicken calculates a per share adjustment to the cost basis based on the number of shares held on that date instead of the ex-dividend date. If the Return of Capital dividend is used to buy additional shares, the purchased shares are included in the calculation of the per share adjustment.

This is incorrect as the Return of Capital dividend only applies to the shares held on the ex-dividend date. As a result, the value of the adjustment is understated. To make matters worse, Quicken adjusts the cost basis of the lot purchased with the Return of Capital dividend.

There is a crude solution to this bug and that is to change the date of the Return of Capital dividend so that it occurs the day before the shares purchased with the dividend were bought. If you purchased additional shares after the ex-dividend date, the date assigned to the Return of Capital must be before the date of that purchase.

Windows users of Quicken have one additional problem to deal with as Quicken merges return of capital dividend and buy transactions into a single reinvest transaction. This requires the user to split the reinvest transaction into separate return of capital dividend and buy transactions.
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