Re: Exchange of Mutual Fund Shares

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In Reply to: Re: Exchange of Mutual Fund Shares posted by Mark on November 24, 2004 at 11:25:09:

: : Mark:

: : I have some (but not all, due to different purchase dates) Class B shares in an AIM fund that automatically convert to Class A Shares. How do I record the exchanges. I do not believe the Split function is the answer. The specific details are as follows on one of the transactions:

: : AIM Select Equity Partial Exchange
: : From Class B to Class A Shares
: :
: : Per Share Quantity Value
: : Class A 7/26/2002 $11.82 225.47 $2,665.06
: :
: : Class B 7/26/2002 $10.75 247.91 $2,665.03 $25.6616

: : Cost Basis (Avg Method)of B Shares Exchanged $6,361.77

: :
: :

: Hi Glenn,

: I didn't quite follow the specifics? Do you have your Class B shares in
: a different investment file from your Class A shares? It sounds like
: your Class B shares got converted to Class A shares, and you got a different
: number of Class A shares in exchange for your Class B shares? If so, that
: would be handled like a merger, where you record a split, and change the
: name/symbol.

: Was your table showing what you had before in B, and what you ended up with in
: A? If so, why do you have an extra value on the "B" line?

: Thanks,
: Mark
: --
: Mark Beiley
: Fund Manager, portfolio management software for Windows 95/98/ME/NT/00/XP/2003
:

Mark:

Only SOME of the B shares, not all, were exchanged for A Shares. Therefore, I need a new file for the A shares. Additionally, the cost basis info needs transferred over as well. That is why the extra value is on the "B" line. It is the cost basis of the Class B shares exchanged for A Shares. My problems are:

1) When shares are exchanged they utilize a carryover cost basis and holding period for tax purposes.
2) There was a difference in the number of shares exchanged to the NAV of the funds being different. Split or merge function does not appear to solve my problem.
3) I initially recorded it as a sale, but for purposes of the Gain/Loss report, I do not want to show a sale of something that wasn't sold.
4) I would presume that numerous FundManager users make this or similar type exchanges on a regular basis. Specifically, tax free exchanges of B shares to A. Or, exchanges of funds within a fund family. I am suprised there is not a more efficient method to handle these type of transactions.

Hope this gives you a better idea of my problem.

Thanks for any further assistance.

Glenn

Replies:

• Re: Exchange of Mutual Fund Shares Mark 13:37:02 11/24/04 (0)