Mr. & Mrs. Happyclient had a joint account. Unfortunately Mr. Happyclient passed away unexpectedly. In settling the estate, the “tax gods” decreed that half of every asset in the joint account and its cost basis should be transferred to a new taxable account in Mrs. Happyclient’s name.
But how do you split the cost basis of account in half in PortfolioCenter? After much trial and error, the process below produced the best solution.
Use the TransactionWriter Account Transfer Wizard. The wizard creates transfers for the entire holding out of the original account and receipts for each trade lot into the new account. But don’t post them.
If you are doing this months after the date of death (DOD), you may need to temporarily cancel all transactions after the DOD. Also, you might want to temporarily change the matching method on the account to SELECT LOTS or FIFO.
Repeat this process so you have two identical lists.
In one list, edit the receipts so that they become transfers out of the original account for half each trade lot. Don’t forget to adjust the market value.
I found it easier to cut and paste the transactions into excel and let it do the math. Then put those numbers back into my list.
Post the transfers one by one using the SELECT LOTS method and matching each transaction to it’s original trade lot.
This method forces PortfolioCenter to transfer half the cost basis of each lot. I know this is very time-consuming. But it is necessary at this point. My consultation with Schwab Tech support confirmed there is no other method to accomplish this step. However it is on their list of future enhancements. By the way, if you do not reinvest dividends, your life will be much easier — at least in terms of maintaining cost basis.
In your second transaction writer list, edit the receipts so the receipts are for half of each trade lot and half the cost basis.
Again, I copied the transactions to Excel to do the math. Also, I ran the Security Reconciliation report on the original account so I had a record of cost basis of PortfolioCenter transferred from each lot. The original trade date should be in place from the transaction wizard.
Post the receipts and reconcile the cost basis in PortfolioCenter with your broker.
While this method is time-consuming, it worked. The majority of positions reconciled to the broker’s adjusted cost basis exactly. For those that differed, the difference was within $1.00 of the broker’s cost basis.
All that was left to do was change the matching method on the original account back to its default.
Don’t want to handle all this yourself? Consider outsourcing