Tax-exempt dividends for muni bonds in Quicken Mac?

John Stenmark

We have some tax-exempt muni bond funds as part of our taxable portfolio. I need to discern between taxable and tax-exempt income.  

When converting from Quicken Windows to QM2016, the category of all of the tax-exempt dividends on our muni bond funds was converted from "_DivIncTaxFree" to "Investments:Dividend Income."  The software won't allow me to change this. Nor can I set up a category for tax-exempt dividends as a subcategory for Investments, and when entering investment transactions it automatically assigns the Dividend Income category. 

What am I doing wrong??

J_Mike

What am I doing wrong?? 
-  Nothing - you have encountered a limitation (oversight?) in QMac. Numerous common investment income categories are missing.

You are correct - one can not add new subcategories to the Investment cayegory.
What I have done is create a new parent category; e.g., Investment Income Misc. and then created subcats for such things as tax-exempt bond interest, OID interest, tax-exempt dividends, etc.
You can assign the appropriate tax line items to these added subcats and they will be properly reported in the Tax Schedule Report.

You can then go back to your account register and edit the transactions that incorrectly converted. Use the register filtering, sorting and search functions to make the editing as painless as possible. Note that in QMac, you can select groups/blocks of transactions for limited editing.

Concordman

I have set up a separate category for both out of state Muni's & in state Muni's. For the out of state muni's I have the category set up as Investment Income Misc:scheduleB:int inc taxed only by the state. 

For in state Muni's I have it set up as Investment Income Misc;Schedule B; interest non taxable..but the definition shown for interest income non taxable does not make sense to me..What am I missing here?

Concordman

For in state Muni's perhaps it needs to be... Investment Inc Misc;Schedule B;state & muni Bond Interest ?  Definition seems to make more sense

M C Crockett

I was looking for information on another bond issue that I have.

If you open the Securities window in QM2017 and open an entry for a bond or a bond mutual fund, you will find a checkbox that allows you to specify that the security is "tax-free".  On a second check, I discovered that any security can be marked as "tax free".

The bond dividends will be reported in Tax Schedule > Schedule B.  If you generate a TXF file, the dividends are reported on Schedule B.  There doesn't seem to be anyway to indicate that the dividends should be reported in Form 1040 Line 8b.

Concordman

MC I think we will need JM to reply on this one..I have not yet started dealing with Turbotax (this will be my last yr using the beancounter). Planning a practice run this yr using Turbotax in conjunction with the bean counter.

John Stenmark

JM, sorry for the delay. I waited for QM2007 to see if the trouble was solved--it wasn't. I attempted to use your workaround but encountered more bad news about years of tax-exempt dividends that transferred from QW. In QW, we didn't reinvest the tax-exempt dividends. The transactions were entered in QW as a dividend w/ transfer to a MMF. 

The transfer to QM2017 converted this to be two transactions: the dividend followed by the transfer. That's OK, but QM won't let me edit the category in either transaction. The category is "Transfer" and I can't change it.  Looks like I'm stuck with years of inaccurate data. I'll try your fix going forward.

Thanks for your help.

M C Crockett

John Stenmark said:

JM, sorry for the delay. I waited for QM2007 to see if the trouble was solved--it wasn't. I attempted to use your workaround but encountered more bad news about years of tax-exempt dividends that transferred from QW. In QW, we didn't reinvest the tax-exempt dividends. The transactions were entered in QW as a dividend w/ transfer to a MMF. 

The transfer to QM2017 converted this to be two transactions: the dividend followed by the transfer. That's OK, but QM won't let me edit the category in either transaction. The category is "Transfer" and I can't change it.  Looks like I'm stuck with years of inaccurate data. I'll try your fix going forward.

Thanks for your help.

If you display the Transfer column and enter the target account in the Transfer column, you should be able to change the Category field to reflect the correct category.

John Stenmark

John Stenmark said:

JM, sorry for the delay. I waited for QM2007 to see if the trouble was solved--it wasn't. I attempted to use your workaround but encountered more bad news about years of tax-exempt dividends that transferred from QW. In QW, we didn't reinvest the tax-exempt dividends. The transactions were entered in QW as a dividend w/ transfer to a MMF. 

The transfer to QM2017 converted this to be two transactions: the dividend followed by the transfer. That's OK, but QM won't let me edit the category in either transaction. The category is "Transfer" and I can't change it.  Looks like I'm stuck with years of inaccurate data. I'll try your fix going forward.

Thanks for your help.

Thanks, M C.  I just got off a long call with Quicken Support.  The call confirmed that QM is not handling the tax-exempt dividends and no workaround exists.  I entered a request on the Feedback web page; would appreciate a few votes for it to see if we can get this on the list for future QM updates.  
Thanks!

M C Crockett

John Stenmark said:

JM, sorry for the delay. I waited for QM2007 to see if the trouble was solved--it wasn't. I attempted to use your workaround but encountered more bad news about years of tax-exempt dividends that transferred from QW. In QW, we didn't reinvest the tax-exempt dividends. The transactions were entered in QW as a dividend w/ transfer to a MMF. 

The transfer to QM2017 converted this to be two transactions: the dividend followed by the transfer. That's OK, but QM won't let me edit the category in either transaction. The category is "Transfer" and I can't change it.  Looks like I'm stuck with years of inaccurate data. I'll try your fix going forward.

Thanks for your help.

I have an open problem report for this issue with Quicken.  In addition, I have an open problem report regarding the per share adjustment calculations for a Return of Capital that is, also, non-taxable.  This one is particularly egregious as it also is present in the Quicken Premier product that I continue to use as investment transactions involving corporate acquisitions and corporate divestitures are not yet supported in Quicken for Mac.