Spinoff and then using specific lot for shrs sold by parent

[rmiz]

I had a company that did a spin off. I subsequently sold some shares of the parent company based on specific lots.
When I receive my 1099 from the brokerage firm, the specific lot amounts did not agree with those in the fund manager. Bottom line is the spin off amount and sales are not in agreement with the Fund manager amounts.
Is there anyway for me to adjust the amounts in the fund manager so they agree with my brokerage statements?
When I did the spin off in Fund manager, I used the shares, cost and market value shown on the brokerage statement. I used tax-free status. I used the same accounting method as the brokerage firm, which is specific lot. I use scale by cost allocation method.

Please let me know your recommendation and resolving this deviation.
Regis Mizikar

[Mark]

Hi Regis,

When using the "scaled by cost" allocation method, if you have multiple lots you will see a Transfer Out and In for each original lot. The Transfer In will have the new cost basis. If you want to change it, you can edit the tax cost basis in the Transfer In transaction.

[rmiz]

Mark
I opened the data register for the parent company. I right clicked on a transfer in transaction. The transfer in share screen opened. I adjusted the value in the tax cost base section. I saved the transaction. When I opened the capital gains report, that transaction does not appear on the report.  The report selected the next available purchase . However, these shares were not sold.

In an effort to try and resolve the issue, I deleted the sale related to the adjustment and re-entered it. Did not make any difference any ideas?

regis

[Mark]

Hi Regis,

In the parent have you specified all the shares? When you record a spin-off, you'll get a transfer out and in for each open lot at the time of spin-off. If you want to use the specific lot method you have to "specify" all of these, so that each transfer out picks its associated transfer in. In the "Specify Lots" dialog box you need to make sure there is a check mark next to all the "Redemptions" in the box on the left. The "Transfer Out" transactions won't be listed in the Capital Gains report, but you do need to "Specify" them, so FM knows which shares were transferred. What is happening here is a way to lower the cost basis in the parent by transferring out and back in all the shares, but at a lower basis. You can then sell these transferred in shares, and again specify which transferred in shares you sold with this sell transaction. One common problem is to not specify all the redemptions. In order to get a gain/loss reported when using the specify lots method, you have to fully specify all sold and transferred out shares.