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Posted by Jay M Apple on May 16, 2007, 5:19 pm
Please log in for more thread options
[Using Q05Basic R2 on WinXP for my sister-in-law. I have 10+umpteen years
using Quicken on my own PC]
This post contains Background, Problem and Questions sections. Patience,
please, I beg of you.
BACKGROUND:
Taught sister-in-law (hereinafter SIL) couple of years ago about Quicken for
her checking, savings, and credit cards. We purposely left investments out
as she found it overwhelming.
SIL now retiring after lifetime at AT&T Corp., many of its operating
companies (she traveled the country staying a couple of years here, a couple
there), Baby Bells (post Judge Green) and back through mergers to AT&T Inc.
She participated throughout, when available, in savings plans with
reinvested dividends, occasionally had shares distributed out, and - of and
on - had shares on hand directly registered in book form. Add to this that
AT&T et al kept track of activities up to 1986 or 87 in terms of "plan
years".
To determine her positions and cost basis thereof I have undertaken to sort
out drawers-worth of old statements - some, but not all -since early 70's,
and am closing in on AT&T Inc. and 2007. Thanks to all for counsel to others
in threads in this forum on AT&T issues throughout the years. They have been
invaluable.
PROBLEM
Just as I think I am getting things organized and properly accounted for in
Quicken, including splits and spin-offs, SIL manages to find the odd
"missing" statement from way back. These explain what really happened (and
when) to some shares that previously had "appeared out of nowhere" or
"disappeared into thin air" over the years.
If I now enter the real transactions (per R.C's advice, often repeated, look
at what happened in the real world then figure out how to handle in
Quicken), rather than my "adjustments" I fear the effect of later splits -
already registered in Quicken - will be incorrect.
NOTE: Concerning some of the earlier summary statements I have already had
to make educated best guesses as to dates and effective share prices to
register reinvested dividends. Common sense used throughout, I hope.
QUESTIONS
Am I correct in fearing screwing up results if I make corrected "early"
entries indicated above?
Can I delete splits and spin-offs (which affect basis allocations), enter
the "new" missing info SIL has found, then re-enter splits and spin-offs so
that calculations cascade correctly?
Can spin-offs be ignored in above process?
Can spin-offs, by the way, be ignored if the resulting stocks, fractional or
otherwise, were sold years ago?
THANKS FOR YOUR PATIENCE IN READING THROUGH THIS.
THANKS IN ADVANCE FOR YOUR CONSIDERATION AND ADVICE.
SIL isn't going to up and sell her stock(s) right this minute, but I think
she should be prepared for whenever she needs to. While I may survive this
exercise there is no guarantee I'll be around to explain what I did beyond
notes made in memo fields. Rolling over her 401K will be a more pressing
issue, but I have not offered to even look at her stacks of statements, much
less tackle them to understand where things came from.
Jay
.(Wishing I were a CPA, even retired, like R.C., ==AND== a Quicken senior
like John Pollard).
.
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Posted by R. C. White on May 17, 2007, 10:03 am
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Hi, Jay.
As my 4-year-old grandson often sings, "When you've got a BIG job, you gotta
get a BIG machine!" And it sounds like you've go a big job here. :-{
During my 30 years of practice, I had to work out AT&T histories for several
clients who had held Ma Bell shares for decades. It was a big job then, and
that was before the several more-recent spin-offs and mergers. Of course,
you do have a couple of tools that were not available back then, especially
the Internet, which gives quick access to SEC filings and explanations by
the company attorneys and investor relations departments. And you have
Quicken which, when fed the proper information, does a good job of
allocating the original basis among the shares still held. (But you'd
better be sure to date your Quicken entries properly so that the split
ratios, etc., are allocated among the correct number of shares for EACH
transaction.)
One of the most valuable tools for me was Capital Changes Reports, a
multi-volume (and expensive!) subscription service from CCH (Commerce
Clearing House). This service, updated weekly, reported all changes in
stocks of public companies. I'm not sure how far back the CCR started, but
it went back at least into the 1930's. CCR was a significant part of the
wall of black loose-leaf binders in my office, but I haven't looked at CCR
in years; maybe it no longer exists. But if you know a CPA, a tax or
probate attorney, a bank trust officer, or even a stockbroker, who has a
strong tax library, you might see if they have a set of CCR that you can use
for a few days.
If you knew that a client owned 100 shares of AT&T on January 1, 1940, for
example, you could track that batch through the many evolutionary changes up
to the present day. And if you knew the cost basis for those 100 original
shares, you could calculate the basis for each of the shares owned today, in
all the many present companies. Of course, CCR did not know how many whole
and fractional shares might have been sold along the way, so you still had
to find that information from the client's own records.
As to your specific questions, here are my best shots:
> QUESTIONS
>
> Am I correct in fearing screwing up results if I make corrected "early"
> entries indicated above?
Yes and no, depending on how you define "screwing up results". You almost
certainly will change the current bases that you already have so tediously
calculated. But the end results should be more-accurate bases. And you may
be surprised at how many future "re-dos" will be avoided by getting all
transactions properly entered chronologically.
> Can I delete splits and spin-offs (which affect basis allocations), enter
> the "new" missing info SIL has found, then re-enter splits and spin-offs
> so
> that calculations cascade correctly?
Yes. That is what you must do. And, as I just indicated, it might actually
make the rest of the job easier, not harder. When the sequence of entries
is correct, Quicken should get the right answer, even cascading through
later transactions.
> Can spin-offs be ignored in above process?
No. You will need to allocate basis at each step, between the original
shares and the new spun-off company shares.
> Can spin-offs, by the way, be ignored if the resulting stocks, fractional
> or
> otherwise, were sold years ago?
No. You can't properly calculate the gain on the sold shares OR the basis
in the remaining shares, without properly recording the spin-off. After
recording the spin-off and recalculating the bases, you can ignore any
shares that were sold so long ago that those years can not now be audited or
amended. No need to track further changes in those shares - unless they
later spun-off even more companies whose shares must still be tracked. :>(
In looking up some recent transactions, Jay, I found some pages at the AT&T
website that offer to shorten this big job in some cases. If you can say
that SIL acquired 100 shares of SBC on 1/1/90 and never sold any of those
shares or any shares spun off from those, then you may be able to look up
the current composition of holdings from that lot.
At the risk of sounding morbid, I could suggest that she just hold ALL her
shares until her death. At that time, her executor would have them
appraised for probate purposes and those values would become their new bases
in the hands of her estate and heirs. But, if she gives away some or all of
the shares before her death, then the recipient will inherit the
basis-tracking problems along with the shares. :>(
You have an interesting problem, Jay. These situations can be as
fascinating as a game of Adventure ("You are in a maze of twisty little
passages."), or as boring and tedious as trying to calculate Pi to a
thousand decimal places.
RC
--
R. C. White, CPA
San Marcos, TX
(Retired. No longer licensed to practice public accounting.)
rc@grandecom.net
Microsoft Windows MVP
(Currently running Vista Ultimate x64)
> [Using Q05Basic R2 on WinXP for my sister-in-law. I have 10+umpteen years
> using Quicken on my own PC]
>
> This post contains Background, Problem and Questions sections. Patience,
> please, I beg of you.
>
> BACKGROUND:
>
> Taught sister-in-law (hereinafter SIL) couple of years ago about Quicken
> for
> her checking, savings, and credit cards. We purposely left investments out
> as she found it overwhelming.
>
> SIL now retiring after lifetime at AT&T Corp., many of its operating
> companies (she traveled the country staying a couple of years here, a
> couple
> there), Baby Bells (post Judge Green) and back through mergers to AT&T
> Inc.
> She participated throughout, when available, in savings plans with
> reinvested dividends, occasionally had shares distributed out, and - of
> and
> on - had shares on hand directly registered in book form. Add to this that
> AT&T et al kept track of activities up to 1986 or 87 in terms of "plan
> years".
>
> To determine her positions and cost basis thereof I have undertaken to
> sort
> out drawers-worth of old statements - some, but not all -since early 70's,
> and am closing in on AT&T Inc. and 2007. Thanks to all for counsel to
> others
> in threads in this forum on AT&T issues throughout the years. They have
> been
> invaluable.
>
> PROBLEM
>
> Just as I think I am getting things organized and properly accounted for
> in
> Quicken, including splits and spin-offs, SIL manages to find the odd
> "missing" statement from way back. These explain what really happened (and
> when) to some shares that previously had "appeared out of nowhere" or
> "disappeared into thin air" over the years.
>
> If I now enter the real transactions (per R.C's advice, often repeated,
> look
> at what happened in the real world then figure out how to handle in
> Quicken), rather than my "adjustments" I fear the effect of later splits -
> already registered in Quicken - will be incorrect.
>
> NOTE: Concerning some of the earlier summary statements I have already
> had
> to make educated best guesses as to dates and effective share prices to
> register reinvested dividends. Common sense used throughout, I hope.
>
> QUESTIONS
>
> Am I correct in fearing screwing up results if I make corrected "early"
> entries indicated above?
>
> Can I delete splits and spin-offs (which affect basis allocations), enter
> the "new" missing info SIL has found, then re-enter splits and spin-offs
> so
> that calculations cascade correctly?
>
> Can spin-offs be ignored in above process?
>
> Can spin-offs, by the way, be ignored if the resulting stocks, fractional
> or
> otherwise, were sold years ago?
>
> THANKS FOR YOUR PATIENCE IN READING THROUGH THIS.
>
> THANKS IN ADVANCE FOR YOUR CONSIDERATION AND ADVICE.
>
> SIL isn't going to up and sell her stock(s) right this minute, but I think
> she should be prepared for whenever she needs to. While I may survive this
> exercise there is no guarantee I'll be around to explain what I did beyond
> notes made in memo fields. Rolling over her 401K will be a more pressing
> issue, but I have not offered to even look at her stacks of statements,
> much
> less tackle them to understand where things came from.
>
> Jay
> .(Wishing I were a CPA, even retired, like R.C., ==AND== a Quicken senior
> like John Pollard).
|
|
Posted by Jay M Apple on May 18, 2007, 10:37 am
Please log in for more thread options
> Hi, Jay.
>
> As my 4-year-old grandson often sings, "When you've got a BIG job, you
gotta
> get a BIG machine!" And it sounds like you've go a big job here. :-{
>
>>>>>>>>>>>>>>> SNIP >>>>>>>>>>>>>>>>>>>>>>>
>
> As to your specific questions, here are my best shots:
>
> > QUESTIONS
> >
> > Am I correct in fearing screwing up results if I make corrected "early"
> > entries indicated above?
>
> Yes and no, depending on how you define "screwing up results". You almost
> certainly will change the current bases that you already have so tediously
> calculated. But the end results should be more-accurate bases. And you
may
> be surprised at how many future "re-dos" will be avoided by getting all
> transactions properly entered chronologically.
>
> > Can I delete splits and spin-offs (which affect basis allocations),
enter
> > the "new" missing info SIL has found, then re-enter splits and spin-offs
> > so
> > that calculations cascade correctly?
>
> Yes. That is what you must do. And, as I just indicated, it might
actually
> make the rest of the job easier, not harder. When the sequence of entries
> is correct, Quicken should get the right answer, even cascading through
> later transactions.
>
> > Can spin-offs be ignored in above process?
>
> No. You will need to allocate basis at each step, between the original
> shares and the new spun-off company shares.
>
> > Can spin-offs, by the way, be ignored if the resulting stocks,
fractional
> > or
> > otherwise, were sold years ago?
>
> No. You can't properly calculate the gain on the sold shares OR the basis
> in the remaining shares, without properly recording the spin-off. After
> recording the spin-off and recalculating the bases, you can ignore any
> shares that were sold so long ago that those years can not now be audited
or
> amended. No need to track further changes in those shares - unless they
> later spun-off even more companies whose shares must still be tracked.
:>(
>
AAAAAAAAAAAAAARRRRRRRRRRRRRGGGGGGGGHHH !!!!!!!!!!!
Sorry. Had to get that off my chest.
Really, R.C., I deeply appreciate your stopping by and the insight you have
provided. It confirms some of my worst fears (See AARRGGHH above.) as to
extra work ahead, but if I wind up with a reasonably accurate history, it
will be worth it for SIL.
You can bet I will hold aside backups fo the work-in-progress at each major
change step so I can backtrack if necessary. I will also keep copious notes
of what I am doing and why, as well as keeping a list of sources which I can
footnote.
The list is already almost finished in the form of a spreadsheet, as I can
then sort on dates, companies, stock IDs and the like. This should provide
me a good view of the chronology of events and relationships among them.
Once I gain additional undertanding I will make the changes in the Quicken
work done so far. Seems to be a good idea, also, to annotate evident results
of changes (like deleting splits and backing out of spin-offs).
>
> At the risk of sounding morbid, I could suggest that she just hold ALL her
> shares until her death. At that time, her executor would have them
> appraised for probate purposes and those values would become their new
bases
> in the hands of her estate and heirs. But, if she gives away some or all
of
> the shares before her death, then the recipient will inherit the
> basis-tracking problems along with the shares. :>(
>
I think my wife and I are the executors, but would rather do the work now
and enjoy SIL for as many years to come as possible.
>
> >>>>>>>>>>>>>>>>SNIP >>>>>>>>>>>>>>>>>>>>>>>>>
>
Again, R.C., many thanks.
Jay
.
|
|
Posted by R. C. White on May 18, 2007, 12:09 pm
Please log in for more thread options Hi, Jay.
> AAAAAAAAAAAAAARRRRRRRRRRRRRGGGGGGGGHHH !!!!!!!!!!!
Understood!
In case you haven't already found it, this page should get you off to a good
start:
Cost Basis Guide for Stockholders
http://www.att.com/gen/investor-relations?pid=5677
> I think my wife and I are the executors, but would rather do the work now
> and enjoy SIL for as many years to come as possible.
I understand this, too.
> Again, R.C., many thanks.
You're welcome. ;<)
RC
--
R. C. White, CPA
San Marcos, TX
(Retired. No longer licensed to practice public accounting.)
rc@grandecom.net
Microsoft Windows MVP
(Currently running Vista Ultimate x64)
>
>> Hi, Jay.
>>
>> As my 4-year-old grandson often sings, "When you've got a BIG job, you
> gotta
>> get a BIG machine!" And it sounds like you've go a big job here. :-{
>>
>>>>>>>>>>>>>>>> SNIP >>>>>>>>>>>>>>>>>>>>>>>
>>
>> As to your specific questions, here are my best shots:
>>
>> > QUESTIONS
>> >
>> > Am I correct in fearing screwing up results if I make corrected "early"
>> > entries indicated above?
>>
>> Yes and no, depending on how you define "screwing up results". You
>> almost
>> certainly will change the current bases that you already have so
>> tediously
>> calculated. But the end results should be more-accurate bases. And you
> may
>> be surprised at how many future "re-dos" will be avoided by getting all
>> transactions properly entered chronologically.
>>
>> > Can I delete splits and spin-offs (which affect basis allocations),
> enter
>> > the "new" missing info SIL has found, then re-enter splits and
>> > spin-offs
>> > so
>> > that calculations cascade correctly?
>>
>> Yes. That is what you must do. And, as I just indicated, it might
> actually
>> make the rest of the job easier, not harder. When the sequence of
>> entries
>> is correct, Quicken should get the right answer, even cascading through
>> later transactions.
>>
>> > Can spin-offs be ignored in above process?
>>
>> No. You will need to allocate basis at each step, between the original
>> shares and the new spun-off company shares.
>>
>> > Can spin-offs, by the way, be ignored if the resulting stocks,
> fractional
>> > or
>> > otherwise, were sold years ago?
>>
>> No. You can't properly calculate the gain on the sold shares OR the
>> basis
>> in the remaining shares, without properly recording the spin-off. After
>> recording the spin-off and recalculating the bases, you can ignore any
>> shares that were sold so long ago that those years can not now be audited
> or
>> amended. No need to track further changes in those shares - unless they
>> later spun-off even more companies whose shares must still be tracked.
> :>(
>>
>
>
> AAAAAAAAAAAAAARRRRRRRRRRRRRGGGGGGGGHHH !!!!!!!!!!!
>
> Sorry. Had to get that off my chest.
>
> Really, R.C., I deeply appreciate your stopping by and the insight you
> have
> provided. It confirms some of my worst fears (See AARRGGHH above.) as to
> extra work ahead, but if I wind up with a reasonably accurate history, it
> will be worth it for SIL.
>
> You can bet I will hold aside backups fo the work-in-progress at each
> major
> change step so I can backtrack if necessary. I will also keep copious
> notes
> of what I am doing and why, as well as keeping a list of sources which I
> can
> footnote.
>
> The list is already almost finished in the form of a spreadsheet, as I can
> then sort on dates, companies, stock IDs and the like. This should provide
> me a good view of the chronology of events and relationships among them.
>
> Once I gain additional undertanding I will make the changes in the Quicken
> work done so far. Seems to be a good idea, also, to annotate evident
> results
> of changes (like deleting splits and backing out of spin-offs).
>
>>
>> At the risk of sounding morbid, I could suggest that she just hold ALL
>> her
>> shares until her death. At that time, her executor would have them
>> appraised for probate purposes and those values would become their new
> bases
>> in the hands of her estate and heirs. But, if she gives away some or all
> of
>> the shares before her death, then the recipient will inherit the
>> basis-tracking problems along with the shares. :>(
>>
>
> I think my wife and I are the executors, but would rather do the work now
> and enjoy SIL for as many years to come as possible.
>
>>
>> >>>>>>>>>>>>>>>>SNIP >>>>>>>>>>>>>>>>>>>>>>>>>
>>
> Again, R.C., many thanks.
>
> Jay
|
|
Posted by Jay M Apple on May 22, 2007, 2:21 pm
Please log in for more thread options
> Hi, Jay.
>
>>>>>>>>>>>>SNIP>>>>>>>>>>>>>>>>>
> >>
> >> > Can I delete splits and spin-offs (which affect basis allocations),
> > enter
> >> > the "new" missing info SIL has found, then re-enter splits and
> >> > spin-offs
> >> > so
> >> > that calculations cascade correctly?
> >>
> >> Yes. That is what you must do. And, as I just indicated, it might
> > actually
> >> make the rest of the job easier, not harder. When the sequence of
> >> entries
> >> is correct, Quicken should get the right answer, even cascading through
> >> later transactions.
> >>
>>>>>>>>>>>>>>>>>>>>>SNIP>>>>>>>>>>>>>>>>>>>
Seems that after eliminating - in reverse chronological order - all splits
in shares of AT&T and resulting Baby Bells, that Q has not done the math to
"reconstitute" the original cost basis of earlier acquired shares.
Also, I got a couple of error messages (which I can't quote at this time -
about being able to calculate number of shares correctly. I guess here that
later posted sales or transfers of "large" number of shares - made possible
by splits - got stranded when shares disappeared as I deleted splits.
Any suggestions before I barge ahead?
NOTE: I AM retired and can afford to reenter everything from scratch, but I
am currently feeling boggled by the prospect. As I have backups of the
"before deleting splits" file, I could always start a new file or accounts,
enter the newly found early data mentioned in OP, move dividend reinvestment
transactions piecemeal from old accounts/file to new, and interweave splits
at the appropriate "chronological" moment.
Thanks
Jay
.
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