Converting Vanguard Shares


D

Don R

Vanguard says I can convert my investor shares to admiral shares and get
a lower expense ratio. In Quicken 2007 Premier would this be handled as
a corporate name change? The account is hooked up to Vanguard via
Quicken direct connect. TIA

Don
 
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D

Don R

Don said:
Vanguard says I can convert my investor shares to admiral shares and get
a lower expense ratio. In Quicken 2007 Premier would this be handled as
a corporate name change? The account is hooked up to Vanguard via
Quicken direct connect. TIA

Don
I feel like I'm talking to myself, but just in case no one knew the
answer to my question or you were afraid to offer advice, here's what
Vanguard had to say.

Vanguard Says:

When we converted your Investor Shares to Admiral Shares, Vanguard
treats the conversion as a non-taxable event. Subsequently, there will
be no capital gains or losses associated with the fund conversion.

If you choose to download the transactions, they?ll automatically appear
in the associated accounts, depending on how you track your Vanguard
accounts in Quicken. If you track your accounts by the account number
only, it will appear as a new fund in the account and Quicken will
prompt you to add it to the security list. If you track your accounts by
fund and account number, you?ll have to create a new account in Quicken
to track the newly created Admiral Shares account. Your Investor Share
account balance will be reduced to zero.

If you choose to manually enter the conversion, please enter it as shown
below.

Quicken doesn't currently contain a specific investment transaction for
share class conversions, but the Corporate Acquisition (stock for stock)
transaction will handle a class conversion. The corporate acquisition
will maintain an accurate cost basis for the new share class.

1. Open the account in question and click Enter Transactions.
2. In the Enter Transaction drop down menu, choose Corporate Acquisition
(stock for stock).
3. Complete the form using the following information:
a. Company Acquired - Enter your original share class.
b. Acquiring Company - Enter your new share class.
c. New Shares Issued Per Old Share - Enter the number of new share
class shares received for each original share class share. If you are
unsure of the number to enter here, please check your Transaction
History online, or reply to this message. Please specify the date, fund,
and account number for your Admiral conversion.
d. Price Per Share for Acquiring Company - Enter the closing price of
the new share class on the date of conversion.
4. Click Enter/Done.

The Quicken forum also offers advice on this subject.
 
J

John Pollard

Don said:
I feel like I'm talking to myself, but just in case no one
knew the
answer to my question or you were afraid to offer advice,
here's what
Vanguard had to say.

Vanguard Says:

When we converted your Investor Shares to Admiral Shares,
Vanguard
treats the conversion as a non-taxable event. Subsequently,
there
will be no capital gains or losses associated with the fund
conversion.
If you choose to download the transactions, they?ll
automatically
appear in the associated accounts, depending on how you track
your
Vanguard accounts in Quicken. If you track your accounts by
the
account number only, it will appear as a new fund in the
account and
Quicken will prompt you to add it to the security list. If you
track
your accounts by fund and account number, you?ll have to
create a new
account in Quicken to track the newly created Admiral Shares
account.
Your Investor Share account balance will be reduced to zero.

If you choose to manually enter the conversion, please enter
it as
shown below.

Quicken doesn't currently contain a specific investment
transaction
for share class conversions, but the Corporate Acquisition
(stock for
stock) transaction will handle a class conversion. The
corporate
acquisition will maintain an accurate cost basis for the new
share
class.
1. Open the account in question and click Enter Transactions.
2. In the Enter Transaction drop down menu, choose Corporate
Acquisition (stock for stock).
3. Complete the form using the following information:
a. Company Acquired - Enter your original share class.
b. Acquiring Company - Enter your new share class.
c. New Shares Issued Per Old Share - Enter the number of new
share
class shares received for each original share class share. If
you are
unsure of the number to enter here, please check your
Transaction
History online, or reply to this message. Please specify the
date,
fund, and account number for your Admiral conversion.
d. Price Per Share for Acquiring Company - Enter the closing
price of
the new share class on the date of conversion.
4. Click Enter/Done.

The Quicken forum also offers advice on this subject.
And be advised: the Corporate Acquisition pseudo-transaction
will "acquire" every share you own of the "acquired" company in
every Quicken account where you own that "company". If some of
your shares qualify for conversion to Admiral and some do not,
the Corporate Acquisition transaction may provide a less
satisfying benefit. [You can delete any unwanted "acquisition"
transactions; it's just more work.]
 
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K

Ken and Jane Becker

Don said:
I feel like I'm talking to myself, but just in case no one knew the
answer to my question or you were afraid to offer advice, here's what
Vanguard had to say.

Vanguard Says:

When we converted your Investor Shares to Admiral Shares, Vanguard
treats the conversion as a non-taxable event. Subsequently, there will
be no capital gains or losses associated with the fund conversion.

If you choose to download the transactions, they?ll automatically appear
in the associated accounts, depending on how you track your Vanguard
accounts in Quicken. If you track your accounts by the account number
only, it will appear as a new fund in the account and Quicken will
prompt you to add it to the security list. If you track your accounts by
fund and account number, you?ll have to create a new account in Quicken
to track the newly created Admiral Shares account. Your Investor Share
account balance will be reduced to zero.

If you choose to manually enter the conversion, please enter it as shown
below.

Quicken doesn't currently contain a specific investment transaction for
share class conversions, but the Corporate Acquisition (stock for stock)
transaction will handle a class conversion. The corporate acquisition
will maintain an accurate cost basis for the new share class.

1. Open the account in question and click Enter Transactions.
2. In the Enter Transaction drop down menu, choose Corporate Acquisition
(stock for stock).
3. Complete the form using the following information:
a. Company Acquired - Enter your original share class.
b. Acquiring Company - Enter your new share class.
c. New Shares Issued Per Old Share - Enter the number of new share
class shares received for each original share class share. If you are
unsure of the number to enter here, please check your Transaction
History online, or reply to this message. Please specify the date, fund,
and account number for your Admiral conversion.
d. Price Per Share for Acquiring Company - Enter the closing price of
the new share class on the date of conversion.
4. Click Enter/Done.

The Quicken forum also offers advice on this subject.
Don,

As described above, that's exactly right - it's a corporate acquisition.
Done correctly Quicken will properly figure that there's no tax
implications.

Now, as Mr. Pollard correctly points out, Quicken will exchange all the
Investor Shares for Admiral Shares. This works out just fine if you have
but one Quicken account that has the Investor Shares. However, if you
have multiple Vanguard accounts (IRA, 401K, one in your spouse's name,
etc.) that don't have any such conversion going on, you'll find that
those accounts got converted, too.

The solution, while a taking a little time, is simple: After the
exchange is performed, go to the accounts where the exchange shouldn't
have happened and delete the extra transactions.

You're welcome.

Oh, yeah: The Admiral shares are cool, you get a slightly better rate of
return on them. However, if you end up violating the terms of the
Admiral shares (less invested in them because of shifting things around,
etc.), they'll end up being involuntarily exchanged to Investor shares
again.

In this case, you do another corporate acquisition, but this time in the
opposite direction. That works, too.

Been there, done that, got the tee shirts.

Good luck.

Ken Becker
 

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