If you’re an investor using Quicken, you should find your investment record-keeping pretty straight-forward. There are, however, several tricky investment transactions you may need to record, particularly if you’re an aggressive investor (one who’s willing to bear increased risk in the pursuit of greater returns). These transactions involve short sales, margin loans and interest, call and put activities, employee stock options, and corporate reorganizations. The following paragraphs briefly describe how you record these other types of transactions.

Short Sales

A short sale occurs when you sell stock you don’t actually hold. The logic of a short sale is that rather than buying low and later selling high, you first buy high and then sell low. (To make the transaction, you actually borrow the stock from your broker.)

To record a short sale transaction in Quicken, you just sell a stock you don’t own. Select the Enter Transaction command button, choose the Short Sale option, and fill in the appropriate categories in the Short Sale dialog box.

To show that these are shares you actually owe your broker, Quicken displays the number of shares and the current market value as negative amounts in the Portfolio View window.

To record the transaction in which you close out your short position by buying the stock you’ve previously sold, you record a stock purchase in the usual way.

Margin Loans and Margin Interest

If you purchase a security and the total purchase cost exceeds the cash balance in a brokerage account, Quicken assumes that you’ve borrowed the needed cash on margin from your broker. To show the margin loan, it displays the cash balance as a negative value.

To record margin loan interest in cases where you have a linked cash account, you record the margin loan interest as an expense when you record the withdrawal from the linked cash account that pays the margin interest.

To record margin loan interest in cases where you don’t have a linked cash account, choose the Enter Transaction command button and choose the Margin Interest Expense option. When Quicken displays the Margin Interest Expense dialog box, use it to describe the margin interest.

Calls and Puts

A call is an option to buy a share of stock. A put is an option to sell a share of stock. You may write, buy, or exercise calls and puts.

Writing Calls and Puts

When you write a call or put, what you really do is collect money from someone in return for promising the person the option, or chance, to buy or sell a share of stock at a specified, or strike, price by some future date.

When a call or put expires without being exercised, and this is the usual case, recording the transaction is simple. If you’re the one writing the call or put, just record the transaction as miscellaneous income.

Buying Calls and Puts

If you’re the one buying the call or put, you just record the option purchase the way you do any other stock purchase. If the call or put expires and becomes worthless, just record the sale as a stock purchase with the amount set to zero. (This is the most common case.)

If, on the other hand, you sell the call or put before the expiration date because the call or put can be profitably exercised, you record the sale as a stock sale with the amount set to whatever you sell the option for.

Exercising Calls and Puts

You probably won’t actually exercise a call or put. You’ll probably sell it, as described above. If you do exercise a call or buy option, however, you need to record two transactions.

To record the exercise of a call option, first record a transaction that sells the call option for zero. Then record a transaction that purchases the optioned number of shares at the option price.

To record the exercise of a put option, first record a transaction that sells the put option for zero. Then record a transaction that sells the optioned number of shares at the option price.

TIP

For income tax purposes, what you pay for a call needs to be counted as part of the purchase price if you exercise the call option and purchase shares. What you receive for a put needs to be counted as part of the sales price if you exercise the put and sell shares. This can get complicated, so you may want to consult your tax advisor.

Employee Stock Options

You can track the value of employee stock options in the same way that you track shares of stock. (The purchase price in this case is zero if you don’t pay anything for the option.) The value of the option, of course, is the difference between the exercise price and the fair market value of the vested shares.

The income tax accounting for stock options can get a little tricky, depending on whether the options are part of a qualified incentive stock-option plan or a nonqualified stock-option plan. You may have a taxable gain when you are granted or when you exercise the option, or you may have a taxable gain only later when you sell the shares. If you have questions about the income tax treatment, consult your tax advisor.

For those with money invested in marketable securities, there is a golden opportunity to cash-in on the tremendous RE investment opportunities now available.  Today, there are multiple commercial & residential RE properties available for about 30% to 50% of what they were only two years ago.

For example, CEOs, CFOs or COOs, with large publicly traded companies, who have large blocks of Corporate can leverage those assets to take advantage of investment opportunities.  If you are a forward-thinking investor who wants to retain the future ownership of your assets as well as leverage the present value of your securities for immediate cash needs, this can be a terrific program.

These loans are –

·         Simple & Quick – NO Credit Check / NO Income Verification

NO Upfront Fees / NO Closing Costs / NO Personal Guarantee

·         Loans are “Non-Purpose” – loan can be used for virtually anything borrower wants to accomplish (personal or business)

·         Loans are “Non-Recourse” – giving the borrower the opportunity to simply “walk away” if the collateral falls below a set floor amount

·         High Loan-to-Values – up to 80% LTV (depending upon security); which is much higher than banks and brokerage companies can offer

·         Loans are Interest Only – principal payment at maturity; otherwise loans can be refinanced or extended

·         Low Fixed Interest Rates – usually between 2% to 4%

·         Loan Term – minimum of 3 yrs; also 5 yr / 7 yr / 10 yrs

·         Quick Funded – usually within 5 to 7 business days

Click here for information about Non-Purpose, Non-Recourse Securities Loans