iShares ETF Reinvested Distributions

[Clive]

Hi Mark,

I own an ETF that has declared an unusual annual distribution, described as follows:

* realized capital gains or special dividend
* not paid in cash
* increases investor's adjusted cost base
* number of units (shares) outstanding will not change

Could you guide me on how to input such a transaction so I can capture the increase of cost basis.

This is the link to the formal press release:
http://www.ishares.ca/publish/content/P ... ion_EN.pdf

Regards,
Clive

[Mark]

Hi Clive,

One way you could handle this is a combination of 2 transactions:

1) Record a reinvested capital gain or dividend. The value is how much you want the cost basis to increase by, and you can pretty much choose any number of shares, but you should probably pick a share amount corresponding to the value of this distribution.

2) Record a split transaction to adjust the share balance back to the pre-reinvestment balance.

Example: Let's say you had 100 shares before recording anything. You record a reinvested capital gain for 5 shares, and then a split with a ratio of 100 for 105.

[Clive]

Thanks Mark,

It works perfectly when the reinvested capital gain is recorded on Dec 31 and the split recorded on Jan 1 but when recorded on the same day, I got a small share quantity discrepancy.

Thanks,
Clive