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Posted by Mbt6 on March 29, 2008, 3:08 am
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I have been given a stock certificate. What's the best way to record that
asset in Quicken? The assumption here is that I won't take it into the
broker right away.
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Posted by TomYoung on March 29, 2008, 10:00 am
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> I have been given a stock certificate. What's the best way to record that
> asset in Quicken? The assumption here is that I won't take it into the
> broker right away.
What I would do is create a new "brokerage" account (clicking the
"This account is not held at a financial institution" button), calling
it something like "Have certificates." I'd enter the certificate(s)
in this account in the appropriate manner according to the nature of
how the certificates were acquired. Daily quotes for securities
(certificates) held in this account would update their value properly
(assuming Quicken's quote server system is working!!) and any
subsequent tendering of certificates due to sale, transfer, etc. could
be recorded in the usual fashion.
Tom Young
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Posted by R. C. White on March 29, 2008, 10:12 am
Please log in for more thread options Hi, Mbt6.
Don't record the certificate; record the value of the shares that it
represents. "A stock certificate" could represent a worthless single share
of a company that nobody ever heard of, or a million shares of Microsoft.
(Of course, the certificate itself might be a collector's item worth many
dollars, but I assume that's not the case here, especially since you plan to
eventually "take it into the broker".)
You did say "given", right? The rules for gifts are not the same as for
inheritances, like-kind exchanges, in-kind bonuses or the receipt of
property in other ways rather than buying it. If this was not a gift, then
stop reading here and post back with details.
The first step is to determine the value on the date of the gift of the
shares represented by the certificate. Since you provided no information at
all about that, I'll use 100 shares worth $10 per share as an example. This
is the value of the gift you have received. In Quicken, you will record
this $1,000 in an Income Category as a Gift Received. (My Quicken has that
category, but I don't recall if it was there by default or if I added it.)
Gifts received are not "gross income" according to the Internal Revenue
Code, so this is non-taxable income which need not even be reported to the
IRS by the donee (you, the recipient). The donor may need to report the
gift, but that is not - directly - your problem. But read on...
You will need an Asset Account for the value of the shares. Quicken
provides for Investing Accounts, but it insists that these must be with a
brokerage or trustee, such as an IRA or 401(k) plan. You probably would be
better served in this case by a "generic" asset account. Click Property &
Debt | Add Account and choose Asset. Name it what you like and start it at
any date before the gift (1/1/08 might be a good starting date) and show the
value as zero at that point. (Ignore the "Tax" box on the last creation
screen.)
Now make your entry for the gift. In accountant-speak:
Debit: Asset Account $1,000
Credit : Gift Received $1,000
That's it - for now.
But the hard part might be figuring out your tax "basis for determining gain
or loss" in those shares. The basis of property received as a gift is
GENERALLY the donor's basis in that property, and the donee also inherits
the donor's "holding period" for those shares. But there are many
exceptions to the general rule. A tax-sophisticated donor will accompany
the certificate with a letter or other document showing the facts that the
donee will need for proper treatment of the gift property. If you did not
receive such documentation, then you will need to get it from the donor,
because nobody else is likely to have the information you need.
For our example, let's say that the donor bought those shares 7 years ago
for $2 per share, and that his total basis is $200 and his holding period
began on 4/1/01. Your basis in those shares would now be $200 and if you
sell them next week for $1100, you would recognize $900 of long-term capital
gain. (This is a simple example; let's not get into losses and other
complicated situations.)
You need to record BOTH the FMV (Fair Market Value at the date of the gift)
and your tax basis for the shares. You can use either FMV or basis as the
amount in your Asset Account, and keep good memo entries of the other
amount. FMV is the amount of the non-taxable gift you received; tax basis
is what you will use as your "cost" on your tax return when you sell the
shares.
Since I've been retired for over 15 years, and tax rules continually change,
be sure to check with your own CPA to be sure this is still the correct
treatment for these shares.
RC
--
R. C. White, CPA
San Marcos, TX
(Retired. No longer licensed to practice public accounting.)
rc@grandecom.net
Microsoft Windows MVP
(Currently running Quicken 2008 Deluxe in Vista Ultimate x64 SP1)
> I have been given a stock certificate. What's the best way to record that
> asset in Quicken? The assumption here is that I won't take it into the
> broker right away.
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Posted by John Pollard on March 29, 2008, 8:43 pm
Please log in for more thread options R. C. White wrote:
> You will need an Asset Account for the value of the shares.
> Quicken
> provides for Investing Accounts, but it insists that these
> must be
> with a brokerage or trustee, such as an IRA or 401(k) plan.
> You
> probably would be better served in this case by a "generic"
> asset
> account.
Hi R.C.,
It is possible to create a Quicken "investment" account without
having to tell Quicken that the account is with a specific
financial organization.
For the problem stated by the op in this thread, I think
creating a Quicken "brokerage" account would be the best bet.
That would allow the op to tell Quicken there were "shares"
owned for a security with a specific ticker symbol, so prices
could be downloaded to keep the security value up-to-date.
--
John Pollard
First initial underscore Last name at mchsi dot com
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