Resolving missing cost basis (placeholders)

What are placeholders?

For any security, if the total number of shares listed in the downloaded investment transaction is not equal to the total number of shares represented in the Quicken investing register, then the security is called as an out-of-bound security. In such cases, Quicken adds a placeholder transaction to make up the difference. For example, if you downloaded 250 shares and your broker records 300 shares for the same security, Quicken adds a placeholder entry of 50 shares to make up for the difference.

Each placeholder entry identifies the security name and the difference in the number of shares. It does not include the date of purchase or the price of the share.

This may happen because many financial institutions restrict the data to be downloaded for past 90 days (or in some cases, past 1 year) only. So, if you have purchased some shares prior to that time, then that transaction is not downloaded and listed in your Quicken investing register.

In order to get accurate tax projections and portfolio value, you need to fix these placeholder entries. You can resolve them by entering one transaction or by manually entering your entire transaction history for that security. When the number of shares you account for is equal to the number of shares listed in the cost-basis entry, it is completely resolved. Whereas, when the number of shares you account for is less than the number of shares listed in the cost-basis entry, it is partially resolved. The next section explains the different approaches you can take to resolve placeholder entries, with examples to help you understand better.

How to resolve placeholder entries

You can resolve placeholder entries by using either of the following methods:

Adding approximate estimates

If you are not using Quicken for tax purpose and have no time to trace the past transactions for the security, you can add estimates. An estimate gives you a high-level idea about the gain on that particular security.

To add an estimate:

1. Double-click the placeholder entry or click Add Cost.
2. Click the Add Guesstimate button.
3. A guesstimate sheet appears. Based on the discrepancy in the number of shares, you can enter Average Price/Share or Cost Basis.
4. Click Save to add your estimate.

For example, you downloaded 50 shares of a security into Quicken. Your broker statement mentions that you have 80 shares for the same security. You just click the Add Guesstimate button and enter 30 shares and the average price/share.

Adding/Backfilling older transactions

If you want to track cost basis, use Quicken for tax purposes, or want to track the performace of your holdings, you should add the actual transactions to resolve the out-of-bound entry and get accurate cost basis. This is required for accurate tax reporting and to get the correct long and short-term gain and other implications.

To add older transactions:

1. Double-click the placeholder entry or click the Add Cost link.
2. Click the Add Transactions button.
3. The Add Transaction sheet appears displaying the discrepancy in the number of shares. Select the type of transaction you need to enter from the drop-down list.
   • Note: The transaction date should be earlier than the cost basis transaction date.
4. Enter the details appropriate to the transaction type and click Save.
5. Repeat these steps for all the missing transactions and the shares unaccounted for in Quicken till the value equals zero.
6. If the security had splits, reverse splits, stock dividends or other events which impact the total share count for the security, you'll need to enter those transactions in addition to the buy and/or sell transactions.

An example of backfilling older transactions

Here, it is important to know that the placeholder balance may fluctuate between positive and negative figures until you enter all the missing transactions. Here is an example to help you understand this better.

For this example, assume the table below lists your actual transaction history for a security.

Suppose that you start using Quicken in Jan 2016 and download transactions. Since many brokerages allow downloads for a limited period (90 days or 1 year), you cannot download the entire transaction history. For this example, you are able to download only one transaction; that is, the Jan 1, 2016 Buy 10 shares transaction. At this point Quicken records the purchase date and cost (and thus the cost basis) of this single share transaction.

However, during the first download, the brokerage also provides Quicken with an accurate acocunt of the total number of shares you hold for this secuirty as of today. For this example, it is 40 shares. Since the shares accounted for in Quicken (10) do not add up to the shares you actually hold (40), Quicken inserts a placeholder transaction of +30 shares to balance the number of shares in Quicken. This ensures that that the total number of shares in your portfolio is correct. However, Quicken does not record the cost basis of the missing 30 shares.

Now, you need to enter the entire transaction history as shown in the table below:

Important: Note that there can be swings between positive and negative figures when you are backfilling transactions. These swings might be even bigger if you are entering stock splits or multiple stock splits. However, after you enter all the missing transactions that impact the number of shares, the placeholder value should eventually be zero.

To get the most accurate cost basis, any transactions impacting share balance (buys, sells, splits, stock dividends, reinvests, etc.) must be entered. Other transactions unrelated to share position (cash transactions, dividend or interest payments, etc.) may be entered, but are not required to resolve the placeholder entry.

Tip: If you have an account with many transactions over many years and do not wish to enter everything, you could use the Guessstimate option to account for this missing shares. Just estimate the total cost of the missing shares and enter that value in the guesstimate field. This will get you a gain/loss value on the portfolio view, but should not be used for tax reporting.