I have followed all the proper steps to transfer holdings from an existing
account to a new account. The process was smooth and easy enough, but I
believe there are some real issues with the way the program handles this
transfer. I am using Microsoft Money Plus Deluxe.

First, it does transfer the cost basis correctly, although not in the way it
should for everything a user may want to do in the future. Here are the
issues I have encountered.

If I sell an investment in the new account that was transferred from the old
account, I can pick the lots I want to sell so as to minimize my taxable
gain. This works fine. The lots, purchase prices, dates, etc. have all
transferred over properly so that I can select the ones I want.

However, I can tell that the dates do not transfer to the capital gains tax
reporting correctly. For example, if I designate the lots to sell as one lot
held less than a year and another lot held longer than a year, the lots will
show as separate lines on the capital gains report, but they will both have
the same date, that date being the date of the transfer to the new account.
In my case, they both showed up as short-term capital gains because I just
recently transferred the account. This is frustrating because one of these
lots should be taxed as a long-term capital gain, and not a short-term gain.
This really limits the usefullness of the software.

The other issue I encountered is when using the capital gains tax estimator.
Again, the dates of purchase are all shown incorrectly as the date that the
transfer occurred. Interestlingly enough, the lots are all broken out
correctly, each purchase I actually made being listed on a different line,
but the dates are wrong. Another issue is that the cost basis is shown
incorrectly. Rather than using the actual cost per share for each actual
purchase, it uses the average cost per share for the total position at the
time it was transferred. The data is correct, but again it limits the
usefullness of the application. Any purchase made after the transfer shows
the correct date and the actual cost basis.

How do I correct this? To be honest, I don't think there is an easy way,
and I believe this is a programming flaw. If so, what is the best way for me
to submit this information to Microsoft so that they will (hopefully) fix it.

Frugal

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