Record Various Brokerage Accounts Transactions in Quicken 2012 - dummies

Record Various Brokerage Accounts Transactions in Quicken 2012

By Stephen L. Nelson

Quicken 2012 lets you record all sorts of transactions in a brokerage account. Not only can you do reminder and stock split actions, but you can also do a bunch of other things.

How to record bonds in brokerage accounts

If you invest in bonds, you know that a bond’s price is actually quoted as a percentage of its face value. A bond that sells for $950 with a face value of $1,000, for example, is quoted as 95 because the $950 price is 95 percent of the $1,000 face value.

Quicken, however, doesn’t let you describe a bond’s price as a percent. You must enter the bond price as its price in dollars and cents.

How to record precious metal investments in brokerage accounts

You can use Quicken to record precious metal investments. Suppose, for example, that you’re hoarding Krugerrands (1-ounce gold coins minted in South Africa). For this investment, the price is the price per Krugerrand, and the shares figure is actually the number of ounces (equal to the number of Krugerrands).

Because Quicken doesn’t supply price-per-ounce or number-of-ounces fields, you insert the information in the Price and Shares fields on the Investment list.

How to recording margin interest expenses in brokerage accounts

To record margin interest expense, click the Enter Transactions button and select Margin Interest Expense in the Enter Transaction drop-down list box. When you do, Quicken displays the margin interest expense version of the investment transaction entry dialog box, which you use to describe the cost of your financial adventure.

Only the most sophisticated investors should be using margin interest expense, anyway. If you’re one of these financial cowboys or cowgirls, you’re smart enough to figure out this stuff on your own.

How to pay a miscellaneous expense

Sometimes you need to pay an expense. One rarely sees these occur for stock or bond investments. Expenses sometimes do arise with real estate partnership interests (which can be treated like common stock shares) or precious metal investments (which can also be treated like common stock shares).

If you need to pay a fee for account handling or for storing your stash of South African Krugerrands, for example, you can record such an expense by clicking the Enter Transaction button and then choosing Miscellaneous Expense in the Enter Transaction drop-down list box. When Quicken displays the dialog box, fill out the boxes in the miscellaneous expense version of the investment transaction entry dialog box.

How to record a return of capital

The old return of capital trick. Sometimes, the money you receive because you own a security isn’t really income. Rather, it’s a refund of part of the purchase price.

Consider this example: You buy a mortgage-backed security — such as a Ginnie Mae bond — for which the mortgagee (the person who borrowed the mortgage money) pays not only periodic interest but also a portion of the mortgage principal.

Obviously, you shouldn’t record the principal portion of the payment you receive as income. You must record this payment as a mortgage principal reduction or — in the parlance of investment record keeping — as a return of capital.

As another example, suppose that you invest in a limited partnership or real estate investment trust that begins liquidating. Some of the money that the investors receive in this case is really a return of their original investment, or a return of capital.

To record a return of capital action, click the Enter Transaction button. When Quicken displays the return of capital version of the investment transaction entry dialog box, choose Return Of Capital in the Enter Transaction drop-down list box and describe the security that’s returning capital.

How to record special investment transactions

Quicken also supplies some other investment transaction types. Quicken provides special investment transactions to record the receipt of stock options, exercise of stock options, and repricing of stock options. Quicken also supplies investment transaction types for short selling and investment transactions for dealing with corporate mergers, spinoffs, and reorganizations.