Re: Fund Re-organization

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In Reply to: Fund Re-organization posted by Doug Simmons on August 03, 2005 at 13:43:56:

: Any suggestions on how to handle a mutual fund re-organization so that I can get accurate tax records. This is what has happened:

: (Numbers are for illustration purposes only)

: My mutual fund company decided to combine several of it's similar funds into a single fund. [This situation was caused by mergers and buyouts]

:
: I had 1200 shares of a mutual fund that I have had many tranactions (bought, sold, distributions, etc.) and the total value was $24,000 (at $20 per share). I had started out using the first-in, first-out (FIFO) calculation method for reporting cost basis for sales. FM worked great at helping me calculate the cost basis and my gains. This investment is many years old so there have been many distributions (usually 3 per quarter) so there were many different per share purchase values.

: Now with the reorganization, I now have 1000 shares at $24 per share for the same total value of $24,000.

: I can't just start over since once I started the FIFO method of cost basis reporting, according to IRS, I must continue the FIFO method. Is there anyway I can "backfit" the share ratio for the history of purchases and sales. I received 5/6th (.8333) of a share for each share that I owned, almost like a stock reverse split.

: Any suggestions?

: Doug Simmons

Hi Doug,

Your idea is correct, just record a 5 for 6 split. You can record a split for any ratio you need.

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

Replies:

• Re: Fund Re-organization Doug Simmons 14:26:51 08/03/05 (0)