Optional Dividend Recording

[ballardian]

Hi Mark,

I have a new closed end fun with optional dividends which my broker appears to have selected for shares. My brokerage firm recorded the transaction for shares as "Transfer In" 2 shares costing me 0 dollars. And a second fractional transaction as a Cash In Lieu.

I'm trying to determine the best way to record this in FM. At the moment I have used Transfer In but wasn't 100% sure what I should use for all fields. Currently, I have the market value as what it was that day, OOP Cost Value as zero, and tax cost basis as 0.

I have then recorded a Cash in Lieu Distribution for the fractional shares. This part seems correct.

This is a Roth IRA account btw so tax basis isn't really relevant.

My question is for optional divident paid in shares what do I put for Market Value and OOP cost. Or is there a better way to record this in FM?

My quick math doesn't line up with what I'd expect change wise to the OOP Current Basis /S field. Whether I list a market value or not.

Thanks

[Mark]

Hi ballardian,

I would suggest to record this as a reinvested distribution for the 2 shares, plus a distributed distribution for the additional amount you received in cash.

[ballardian]

Thanks Mark. I had considered that option too but wasn't sure how it would end up.

For some reason I didn't think until after your reply to check my basis in the broker and compare it. Of course it is the same across all options and your recomendation is by far the simpliest.

Thanks