Jo,jo said:richard,Jo,jo said:58:25 PM UTC-5, Richard wrote:
16:16 AM UTC-5, Ken wrote:
On 11/28/2014 3:11 PM, jo wrote:
First year for Ira withdrawal. Had Fed and State taxes
had cash in the Ira to cover it and received a check from
the net amount. From reading various solutions online, I
that the underlying approach is a split transaction in the
account but didn't grasp everything I read.
I've entered the transaction as a transfer of the gross
Ira account to a pseudo account I use for holding
I've split the receiving transaction so that the taxes show
proper [asset] categories and the sum of the taxes offsets
transferred amount to leave the exact amount of the check I
this holding account. The only part missing is how to get
amount to show up into an income category- Ira
i'M sure this is simple, but I'm just not looking at it
Could use some help. It seems like I need to be able to
category to that transfered amount, but obviously I can't
directly. RC?? John?? Anyone?
OK. Calm down.
It's income, but, especially after the broker has taken taxes
all of it may be _taxable_ income. Especially if you've done
non-deductable contributions over time.
You probably know all this, but let's hit it one piece at a
Let's suppose that you have performed nothing but deductable
contributions to your IRA over time. In addition, your IRA
earning money. In that case, the sum total cashed out (before
income. Assuming that you're tracking both the IRA and your
account in Quicken, you hopefully have your IRA _marked_ as
Quicken. (Look under account details on the IRA. Confirm that
thinks that the tax schedule for transfers out of the IRA are
"1099-R: Total IRA taxable distrib.")
Next: In your checking account, do a deposit for the amount
broker sent your. However, in order to keep Quicken sane, do
this transaction. In the split, first line, put down the
that was created in your IRA account before taxes. On the
make the category for the negative amount shown as federal
witholding, just like your paycheck. (On mine, it's Tax:Fed).
Believe it or not, in the Quicken tax planner, the transfer
to your checking account will show up as IRA income, and that
will be the total amount, before taxes. The witholding will
the correct place as money paid to the feds this year.
Where this nifty trick falls on its face is when you've made
non-deductable contributions to the IRA in past years. If you
the non-deductable contributions have been taxed in the year
made them and the _proportion_ _of_ _the_ _distribution_ that
attributable to those non-deductable contributions doesn't
when you take out the money.
Example: Suppose you put in $5,000 of deductable
of non-deductable contributions (total of $7,000). Then, a
years later after your investments have grown, your IRA is
$10,000. (Growth of another $3,000). You now take out $2,500
Of that $2,500, $2,500*(5000+3000)/10000 = $2,000 is taxable
$2,500*(2000/10000)=$500 is not taxable income.
The feds have a nifty IRA distribution form that takes you
the math, handy especially when you have multiple IRAs all
distributions from different IRAs all over.
As far as I know, Quicken doesn't know how to handle the non
portions of IRAs, so it counts it all as income.
Thanks for trying to explain how to do this. Unfortunately it
working, but I also varied the procedure a bit and that may be
Here's the current situation.
1) I have what you described: a simple IRA with all of it tax
contributions earning income over the years. The IRA account
configured as you indicated.
2) My first transaction was not a Deposit,but a Transfer of
amount from the Ira account to my checking. That seemed like
way to mimic the actual event. However I cannot then split
Quicken blocks me.
3) The closest I could come to getting anything correct was to
each component of the total to my checking: the actual amount
and the federal and state tax withheld. That accomplished
Ira balance and assigning the withheld taxes to the correct
but I cannot find any place, either in the Tax Planner, or in
the gross amount shows up as income. I really want it to
latter, along with all other income. Having it just in the TAx
wouldn't suffice, even if it did work.
What am I missing?
What you are missing is the fact that only the gain on the sale
funds is current year income. The original value of the funds
current year income. It should have been considered and shown as
your gross salary income in the year that you transfer the funds
IRA account. In other words, the portion of your salary
your IRA to buy funds was a payroll deduction, transfer to your
the same as taxes or other payroll deductions, i.e. insurance.
shows in your current year reports as 'RlzdGain'. If the
included in current year income, you would be 'double counting'.
you earned the money that you transferred to the IRA account to
funds and again when you withdraw the funds for the IRA account.
solves your problem. In summary, the original cost of the funds
in the year earned and transferred. The gain on the sale of the
income in the year that you withdrew the funds.
Now, hopefully I don't have you completely confused.
I am completely confused I can see this is likely going to be
nightmare. I thought this was simple because I fell into your
scenario: nothing but tax deductible contributions, which meant
withdrawal *was* income this year.
Whatever funds went into this Ira were made decades ago because I
retire on disability back in the 1980s. I have absolutely no
how anything was accounted for back then but vaguely remember
company decided at year end how much they would put in your IRA
based on your salary and how well they had done that year (could
false memory); I don't remember what my W2s looked like at all
wasn't contributing monthly, assuming I was contributing at all.
have my tax returns from back then either, of course, to see how
reporting things either. If I was deducting the company
they were reporting it on a W2), are we back to the simple
The company was bought out by another, and has recently changed
again. I do know some of the people who worked with me back then
able to get a little clarification on how things worked, but
will be enough. When I left the company, I rolled the account
Ira at Fidelity and there were a few years where I was doing a
consulting and contributed a small amount to the account. I did
contribution when I filed tax returns for those years.
Any gains tracked only go back to about 8 years ago, after I
contributing and just let my financial advisor adjust the mix of
investments. There is a cost basis attached to the account,as of
she inherited it from Fidelity, but I doubt that's helpful in
what proportion of my current year's withdrawal is taxable to me.
a mess and obviously not a Quicken problem.
Relax, relax, relax, breathe, breathe, breathe. Not necessary to
because as described below, you really don't have a problem. Your
confused about financial income vs. taxable income.
Based on all of your posts, I'm going to make a few assumptions:
1. Your prior years' tax returns were properly prepared either by
competent tax accountant.
2. You do not have the IRS chasing you.
3. You have little accounting or tax knowledge.
3. You are confusing income for financial accounting (Income and
Report in Quicken) with taxable income. These are two completely
Now, based on the above, this year you will be taxed on 100% of
distribution. A regular IRA, not a Roth IRA, always have 100% of
distribution taxed in the year of withdrawal. You don't need to
any cost basis versus investment earnings for tax purposes. The
managing your IRA will provide all of the necessary tax documents
of January. Your 2014 tax preparation should not be a problem.
The cost basis is only necessary when selling stock from a
account. It may also be necessary for Roth IRA's, but since I don't
one, I'm not sure. To spare anymore confusion, I won't go into an
explanation regarding brokerage or Roth IRA accounts since it isn't
you current concern.
From a financial accounting perspective, the only income this year
interest or dividends earned this year and any increase in market
(RlzdGain) on the funds sold to generate the cash distributed..
will show on a Quicken Income and Expense Report. Remember, the
transferred into you IRA and the interest and dividends from prior
reported as income in the year earned.
From a taxable income perspective, you pay tax on 100% of the
because neither the amount you contributed to the IRA nor the
dividends earned were ever taxed. Since 100% is taxed there is no
know how much is your original contribution or how much you earned
how much the market value increased. 100% is 100%.
If you have properly entered, into Quicken your contributions,
mutual fund purchases, interest and dividends earned and sales and
distributions, you Quicken reports will be properly stated. If not,
help you, nor do I think anyone else can, since you don't have the
A point of curiosity. How many years of data do you have in your
I don't know if I can be of any further help. While I'm a retired
Accountant, I an not, nor have I ever been a Tax Accountant. I know
to accurately prepare my personal tax returns. I purposely stay
doing taxes for others because I don't enjoy it nor do I want the
responsibility. I do believe that I understand Quicken and I am
using the 'interview process' in TurboTax. Maybe R.C. White will
this discussion. He's a retired Public Accountant and has more
this area then I do.
I am not hysterical about this at all, just would like to be able to
the damn transaction in Quicken so that the withdrawal, withholdings
residual amount all appear in categories/accounts/reports where I
In your list of assumptions, I would agree with 1 and 2. As for your
3) I have rather a lot of experience with taxes, having done my own
decades, and helped others to do theirs. I have enough experience
accounting to deal with most situations, but do get confused by some
While I have confirmed that the RMD is completely taxable, I still
know how to enter it in Quicken. While you maintain that it is not
from a financial accounting perspective, it is income from a
perspective and I would like it to show up in my personal P & L
an income category with all my other taxable income. Are you saying
is impossible or just an improper view of the definition of "income"
from a pure accounting perspective?
I'm glad to know that at least some of my assumptions were correct. To
answer your question, shown below,
"Are you saying that is impossible or just an improper view of the
definition of "income" means from a pure accounting perspective?"
YES, I'm saying that it is impossible and improper, if done correctly,
have your RMD show as income in your personal P&L. It, along with any
withheld, WILL show in a Tax Summary report under the 1099-R section.
section also includes any income you received from pension plans.
done correctly, these numbers should agree with any 1099-R tax
that you receive in January from your pension and IRA administrators.
I wish that 'Eternal September' allowed attachments. I would attach
screenshots from Quicken. However, since it does not. I going to
to a website and then post back the links to the screenshots so that
visual see what I'm obviously not able to properly explain. Give me a
two to get this accomplished and then I'll post back with the
links. Hopefully these links will clarify the Quicken entry process
to properly account for a 'traditional IRA" distribution.
You don't need to go to the trouble of posting screen shots. If it is
impossible to get my personal P/L report to show the RMD as income,
have to live with that. I don't care that it is improper from some
conceptual perspective to have it shown there, but so be it. I know it
on the Tax Schedule. I know how to get Quicken to account for the
withdrawal and withholding. I just wanted what to me is logically
to show on one report. There are no other complicating considerations,
and I have no doubt that the RMD will agree with my 1099R.
Thanks so much for sticking with this thread without becoming
condescending. This often happens online when people are having
pinpointing the source of their mental block to a procedure and others
frustrated and assume they are talking to a Quicken illiterate. I'm
but that doesn't mean that I don't sometimes try to get it to do
that it is not designed to do.
Thank you for kind response, much appreciated. I understand your comments
regarding 'mental blocks'. I have them too, but fortunately, not in this
particular situation. One of this days out of the blue, the light will go
and you'll say to yourself 'Aw $%$@, why didn't I figure that out
I'll take one last stab at trying to help 'turn on the light'.
Your contributions to the IRA were income in the year that you earned
money that enabled you to make the contribution. An IRA is a 'TAX
account, not a 'DEFERRED INCOME' account'.
In a very simplistic view, think about it as taking part of a current
paycheck and putting them into a regular savings account. Those earnings
into savings were part of salary income in the year earned. All of the
salary shows as income in the P/L report in the year earned. All that was
done was to part of it into a checking account and some into a savings
account. Five years later, funds are withdrawn from the savings account
placed into the checking account. This transfer does not show as income
that year because it was five year old income. The same is true for an
You are just transferring money from one account to another.
The only difference between putting money into savings versus an IRA is
income tax is paid on the savings upon deposit (i.e. earned), in the case
the IRA, the income tax is paid upon withdrawal (deferred).
Good luck, I bet the light will go on either before or during the
preparation of your 2014 tax return.
I think the light started to go on yesterday and was further brightened by
your explanation. !
GREAT!! Have a Merry Christmas and a Happy New Year.