Accounting question: Switching retirement account managers

[David Carlson]

On 10/12/2013 8:43 PM, Michael DeBusk wrote:
> My employer recently switched account managers for our retirement
> funds. There were a few days to transfer the account, and the price
> went up a bit in the meantime, so I didn't end up with as many shares
> as I had. (The fund is the exact same one.)
>
> Being as I never took possession of the money, how do I account for
> the "missing" shares? Should I show it as a sell and a buy? That seems
> the simplest approach, but it isn't exactly accurate, because I've got
> many years of unrealized gains in there.
>
> I gotta say, I wish there had been a weird market crash during those
> few days and a remarkable correction immediately thereafter, rather
> than the teeny upward tick of the fund price that happened. ;)
>
>
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There is certainly more than one way to do this.  When I was faced with
a similar situation the plan name changed, etc. so I elected to treat it
as sales of all the assets in the old plan, including taking the
corresponding capital gains and losses, then creating accounts for the
new plan, transferring cash, then buying securities in that plan.  It
was even possible in my case to carry the capital gains and losses into
the new plan by creating appropriate transactions, although that was
probably overkill, as they may never need to be accounted for.  In my
case it was all 'before tax' money, so it will all get taxed later.

If you just do as you are suggesting,  using the corresponding prices
for the sale and purchase, your cost basis, if it matters, remains the
same, does it not? 

David C