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Posted by Nancy on March 21, 2007, 11:56 am
Please log in for more thread options > Nancy wrote:
> > wrote:
> >> Nancy wrote:
> >>> I am using Quicken 2006. I want to enter a 3M spinoff
> >>> of Imation and I'm getting an error message: "Security
> >>> name already in use."
>
> >>> Here's what I did:
> >>> I clicked on the placeholder entry in the transaction
> >>> history for 3M, chose Enter History, chose Enter Missing
> >>> Transaction, and chose Corporate Security Spinoff. I
> >>> entered the date, the security name was already there in
> >>> light type, I entered the new shares issued per old
> >>> share, cost per old sshare post spinoff, cost per new
> >>> share, and clicked Enter/Done.
>
> >>> I don't see Imation in the list of my holdings.
>
> >> You do not have to "hold" Imation; all that matters is
> >> if it is already in your Security List (meaning to
> >> Quicken that the company already exists). If you don't
> >> see it in your Security List, make sure it is not
> >> "hidden".
>
> >> You must delete a security from your Security List
> >> before it can be the product of a Quicken spinoff
> >> transaction.
>
> >> --
> >> John Pollard
> >> First initial underscore Last name at mchsi dot com
> >> Please reply to newsgroup
>
> > Dear John,
> > I am embarrassed to say I just found your message. (This
> > is the first time I have used a usenet group.) I had
> > hoped to hear from you because I was impressed with your
> > advice in the archived messages. Following your
> > suggestion, I deleted the security from the Security List
> > (yes, it was there!) and I was able to enter the Imation
> > spinoff. Thank you!
>
> > I am confused about what is listed in the Imation report,
> > though. The report lists a 5/2/1988 buy of 24 shares at
> > $8.142917/share. What I entered was 7/1/1996 buy of 24
> > shares at $8.24333333. I am quite sure I entered whta I
> > meant to enter.
>
> > The other confusing thing is that Quicken recorded a
> > series of Imation buys for each date that we reinvested
> > 3M dividends from 2000 through 2006. I checked our
> > brokerage house records and I see the 3M reinvestment,
> > but I don't see any listing for Imation.
>
> > My father (who is 89, but a much more experienced
> > investor than I) says, "That's fine." Do you think there
> > is anything amiss?
>
> No, I don't think anything is amiss. Quicken's method of
> recording a spinoff *may* not be the best way, but I think it
> "works". Others here can probably explain it better than I, but
> I will offer my view.
>
> Quicken's spinoff transaction is really a pseudo-transaction;
> there is never a true spinoff transaction in your account ...
> there are "Bought" transactions and "Return of Capital"
> transactions. You could - if you were patient - manually enter
> the same transactions yourself and produce the same result that
> Quicken does.
>
> When the spinoff is complete (in Quicken), you want to have the
> correct cost basis in the spunoff company; that means that each
> lot of the company doing the spinoff gets a portion of its cost
> passed to the spunoff company ... on the date of the lot. So
> you may have dated the spinoff transaction on 7/1/1996, but all
> your old lots of 3M contributed some cost basis to Imation, both
> Buy lots and Reinvestment lots.
>
> Quicken's method of handling that is to pretend that you
> actually bought shares of the spunoff company at the same time
> you bought shares of the company doing the spinning off. That
> will make it appear that you owned shares of Imation before
> Imation ever existed ... but I think it produces mostly correct
> results.
>
> There has been another method suggested for handling the spinoff
> which avoids the misleading indication that you owned the
> spunoff company before it existed.
>
> Change the Quicken generated Buy transactions from the spinoff
> to "Shares Added" transactions. Date the Shares Added
> transactions on the date of the spinoff, but make their
> "Acquistion date" the same as the date each of the lots of the
> spinning off company were purchased. Then, to clear the "cash"
> from the account caused by the Return of Capital transactions,
> you edit the Return of Capital transactions to have a "Transfer
> account" of the investment account where the transaction is
> recorded ... causing the Return of Capital transaction to have
> no effect on the cash in the account.
>
> --
> John Pollard
> First initial underscore Last name at mchsi dot com
> Please reply to newsgroup- Hide quoted text -
>
> - Show quoted text -
Thank you very much. I understand. I appreciate your help.
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