Cash (MMF) in a Brokerage Account

Posted by JRoss on May 4, 2009, 4:35 pm

Please log in for more thread options

The dividends from one of the securities in my Fidelity brokerage
account are reinvested in the core account, a muni mmf. However, I
don=92t seem to be able to achieve this in Quicken (09), either manually
or when I download. Instead, the dividends go to the account=92s cash
balance. Am I doing something wrong, or is this just how Quicken
works with a brokerage account? Would it be simpler to just eliminate
the mmf and pretend that I simply have a cash balance?

Posted by R. C. White on May 4, 2009, 5:02 pm

Please log in for more thread options

Hi, JRoss.

> pretend that I simply have a cash balance?

Yep. That’s how I have been handling my Merrill Lynch CMA account for about
20 years.

This might not work for some brokerages because each has its own way of
handling "sweep" accounts.

RC
--
R. C. White, CPA
San Marcos, TX
(Retired. No longer licensed to practice public accounting.)
rc@grandecom.net
Microsoft Windows MVP
(Using Quicken Deluxe 2009 and Windows Live Mail in Win7 x64)

> The dividends from one of the securities in my Fidelity brokerage

> account are reinvested in the core account, a muni mmf. However, I

> don’t seem to be able to achieve this in Quicken (09), either manually

> or when I download. Instead, the dividends go to the account’s cash

> balance. Am I doing something wrong, or is this just how Quicken

> works with a brokerage account? Would it be simpler to just eliminate

> the mmf and pretend that I simply have a cash balance?

Posted by John Pollard on May 4, 2009, 5:28 pm

Please log in for more thread options

JRoss wrote:

> The dividends from one of the securities in my Fidelity brokerage

> account are reinvested in the core account, a muni mmf. However, I

> don’t seem to be able to achieve this in Quicken (09), either manually

> or when I download. Instead, the dividends go to the account’s cash

> balance. Am I doing something wrong, or is this just how Quicken

> works with a brokerage account? Would it be simpler to just eliminate

> the mmf and pretend that I simply have a cash balance?

I think Fidelity often does not download the correct transactions.

But I can't think of any reason why you couldn't manually enter a
reinvestment transaction - remembering that a dividend reinvestment
transaction ("Reinvest-Income Reinvested") is a different Quicken
transaction than a dividend transaction ("Inc-Income (Div, Int, etc").

You should also be able to "Edit" a dividend transaction and change it to
a dividend reinvested transaction.

On the other hand, you may prefer to just leave it as cash. Some
financial institutions allow this directly (though I think you can do it
anyway). To see if Fidelity does, click

Investing > Investing Activities > Adjust Cash Balance (with the Fidelity
account open).

If you see a "Cash Representation" button in the resulting dialog, click
that.

--

John Pollard

Posted by jrossitter on May 4, 2009, 6:38 pm

Please log in for more thread options

> JRoss wrote:

> > The dividends from one of the securities in my Fidelity brokerage

> > account are reinvested in the core account, a muni mmf. However, I

> > don=92t seem to be able to achieve this in Quicken (09), either manuall=

> > or when I download. Instead, the dividends go to the account=92s cash

> > balance. =A0Am I doing something wrong, or is this just how Quicken

> > works with a brokerage account? Would it be simpler to just eliminate

> > the mmf and pretend that I simply have a cash balance?

> I think Fidelity often does not download the correct transactions.

> But I can't think of any reason why you couldn't manually enter a

> reinvestment transaction - remembering that a dividend reinvestment

> transaction ("Reinvest-Income Reinvested") is a different Quicken

> transaction than a dividend transaction ("Inc-Income (Div, Int, etc").

> You should also be able to "Edit" a dividend transaction and change it to

> a dividend reinvested transaction.

> On the other hand, you may prefer to just leave it as cash. =A0Some

> financial institutions allow this directly (though I think you can do it

> anyway). =A0To see if Fidelity does, click

> Investing > Investing Activities > Adjust Cash Balance (with the Fidelity

> account open).

> If you see a "Cash Representation" button in the resulting dialog, click

> that.

> --

> John Pollard

Thanks R.C. and John. ("Cash Representation" wasn't an option.)
I assume that if I edit the dividend to "reinvest" I must change the
security from the actual security which paid the dividend to the one
in which it was reinvested. In my case that's a change from a taxable
to a tax-exempt fund. Will Quicken then think I received a tax-exempt
dividend? Just curious; in recent years I haven't downloaded
investment data from Quicken for tax purposes, so that's not a crucial
consideration.
If I go with the cash option, would I just "sell" all my money fund
shares?

Posted by danbrown on May 4, 2009, 9:00 pm

Please log in for more thread options

WHOA! WHOA! WHOA!

Using a dividend from one security to purchase another security is

NOT NOT NOT

a reinvestment. It's a dividend and a purchase.

No wonder Q can't figure it out ... 'cause you can't either.

And Q can't possibly record what you can't understand!

db