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Author: Capcon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121564  
Subject: Switching brokers - partial shares Date: 2/10/2004 1:52 AM
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In 2003, I switched from BuyandHold to Scottrade and transferred the shares. Because of the way B&H operates, I had partial shares of some of the stocks. On my B&H 1099, they report the partial shares sold (for which they sent me a check).

I kept all the data in the same Quicken file. It appears that the cost basis and proceeds are calculated correctly for the whole shares. (They were imported into TaxCut and I've since sold them all.) But it looks like calculating the partial shares is going to be a nightmare.

In the FAQ, the article on stock splits says that many people use a zero cost basis which, while not entirely correct, seems to work. The entire proceeds of the partial shares is only total $75 and I'd just as soon pay the tax on the whole amount than try to figure out the actual cost. It would be an error, but an error in the government's favor.

Am I asking for trouble?

Cap
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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 69482 of 121564
Subject: Re: Switching brokers - partial shares Date: 2/10/2004 6:02 AM
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Am I asking for trouble?

No, you're looking for trouble where there isn't any. I know not from Quicken, but you say that it calculated the basis of the whole shares. The basis of the partial share is the total basis minus the basis of the whole shares.

Phil

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Author: Capcon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 69487 of 121564
Subject: Re: Switching brokers - partial shares Date: 2/10/2004 12:47 PM
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No, you're looking for trouble where there isn't any. I know not from Quicken, but you say that it calculated the basis of the whole shares. The basis of the partial share is the total basis minus the basis of the whole shares.

Quicken calculates the cost basis and profit/loss, which I then import into TaxCut. But in reviewing it, I realized that I didn't input the original cost basis for the transferred shares, only the price at the time of transfer.

It was only six stocks, so I guess I'll just calculate them the old-fashioned way and edit the TaxCut form. The rest of my trades (probably a couple dozen) should be accurate in Quicken.

My original thought was that for only $75 profit, it was easier to pay the higher tax rate than it was to do the calc. (I know, the tax pros are cringing here.) In retrospect I realize that the whole-share sale is also inaccurate, so I'm going to have to do those six stocks manually anyway.

Thanks for the quick reply.

Cap (glad I'm doing this in February) :-)


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