Reinvested Realized Income & Div Income in 401K and IRA Incorrectly Showing as Income

Dennis B

Realized Income & Div Income which was reinvested in 401k & IRA transfers is incorrectly showing up as income in Current Year ....specifically in my home page reports. It's not income ....it's reinvested ...How to I change this?

Bob_L

Seems like income to me. Please provide what home page reports you mean.

Dennis B

Hi ,,,,,Thanks for your reply. I didn't receive it and it was reinvested back into the tax deferred account from which it came. The dividends I receive on my 401k are similarly reinvested... So in my estimation it isn't really income until I remove it from the 401k. what's wrong with my thinking?
This is the "Income YTD" standard report contained in the Main View....

Bob_L

That report is for Income from all securities and accounts included, not taxable income which I believe you may be expecting? To get that you need to run tax reports or customize the report to exclude those accounts.

Unknown

What Bob L said. Quicken does handle tax deferred or tax exempt investments very well.

Jim_Harman

Or another way to put it might be, "income" may mean very different things depending on your need. Do you want gross pay? after tax? take-home pay? Do you include all investment income? only taxable? only non-retirement? only money moved from investment accounts to spending accounts?

Quicken sets certain defaults but lets you customize reports so you can see pretty much any combination of these, and you may have to do some experimenting and head-scratching to get what you want. 

NotACPA

A reinvested dividend (or interest) is STILL income.  That you've instructed someone to intercept your div/int and use it to buy more of the security is irrelevant.

And the taxability of that reinvDiv/ReinvInt is dependent upon the attributes set for the Q investment account wherein you record the reinvest AND dependent upon the attributes of the security.

BUT, any way that you look at it ... it's still income!

Unknown

Quicken is basically a consumer home finance program. It seems reasonable to expect it would have a preset setup for 401Ks / IRSs / and even MuniBond funds. These are all pretty common investments made by people working for companies that offer plans or retires working with an advisor.

Dennis B

Bob L said:

Seems like income to me. Please provide what home page reports you mean.

My thanks for your reply. This is the report that opens when you first open Quicken...Home Tab - main view. the issue is that while within the 401K I so $20 in securities to purchase others within the program....the $20 K I sold was picked up as Realized Income in the Investments.....It is clearly is not income as I didn't get it ....I merely moved the same dollars around. The automatic download from the 401K noted this transaction as a "Sold" but then the income in reports makes it Realized Income. That is just not income...! I don't know how to get the income for this transaction out of the report...can you advise or help?

Bob_L

Bob L said:

Seems like income to me. Please provide what home page reports you mean.

What is the name of the report?  If you hit the customize button on the  main tab you should see its name.  BTW, there are other snapshots available from that customize button that might be more what you want to see

Dennis B

Bob L said:

Seems like income to me. Please provide what home page reports you mean.

This a standard report from the drop down menu called "Income Year-To-Date"
I do not see a way customize it further or generate a whole new report in this section.

Specifically it lists anything that comes in as income YTD....such as social security, refunds, pension payments etc.....in my case also "Realized Income" which it is not really income. It lists it as "_ RlzGain"  .....any ideas ?

Bob_L

Bob L said:

Seems like income to me. Please provide what home page reports you mean.

Right. You are going to be better off running a report from the reports menus rather than using a snapshot. Take a look at banking, cash flow for example. Or the various spending reports. Just be sure to exclude your retirement accounts when you run them. BTW, after you get a report that meets your need save it. Then from the reports and graph center you can create a folder for it, and any others you like, that will show up on your toolbar. Not as good as a snapshot but it will give you what you want and allow complete customization.

Jim_Harman

Bob L said:

Seems like income to me. Please provide what home page reports you mean.

And if you don't like the snapshots, you can always go to Edit/Preferences/Startup and select something else to view when Quicken starts, like Bill Reminders.

NotACPA

Bob L said:

Seems like income to me. Please provide what home page reports you mean.

Dennis B, actually, while you didn't have a check in your hand your agent, i.e., the fund company or your brokerage had that money and followed your instructions to reinvest the Div.  IF this had taken place in a taxable account, instead of your 401k, it MOST CERTAINLY have not only been income, but would be taxable income.

You're simply denying the truth that this IS INCOME!
In accounting, there are only 4 types of accounts (although Q calls some of them categories):  Those are:
Income
Expense
Asset
Liability.

If this isn't income, what do you think that it is???  Did the size of your 401k just grow by magic when the Reinv happened?

NotACPA

Dennis B said:

Hi ,,,,,Thanks for your reply. I didn't receive it and it was reinvested back into the tax deferred account from which it came. The dividends I receive on my 401k are similarly reinvested... So in my estimation it isn't really income until I remove it from the 401k. what's wrong with my thinking?
This is the "Income YTD" standard report contained in the Main View....

"what's wrong with my thinking?"   It ignores the most basic rules of accounting.  I.E., it's pure fantasy on your part.

J_Mike

Dennis B said:

Hi ,,,,,Thanks for your reply. I didn't receive it and it was reinvested back into the tax deferred account from which it came. The dividends I receive on my 401k are similarly reinvested... So in my estimation it isn't really income until I remove it from the 401k. what's wrong with my thinking?
This is the "Income YTD" standard report contained in the Main View....

Dennis

Think of it this way - you receive a dividend - your net worth increases by the amount of the dividend received.
This occurs regardless of whether you reinvest the dividend in the same security, invest the dividend in a different security, or just let the cash accumulate. What you do with the dividend (income) does not change it's definition - a dividend is income.

If the dividend is received in a retirement account account - the tax is deferred until such time as you begin taking distributions.
If the dividend is received in a taxable brokerage account, your FI will report it as taxable income on a Form 1099. The dividend is taxable income with no regard as to what you choose to do with it - reinvest or not.

Jim_Harman

 It seems reasonable to expect it would have a preset setup for 401Ks / IRSs / and even MuniBond funds. These are all pretty common investments made by people working for companies that offer plans or retires working with an advisor.

Well it supports paychecks, credit cards, mortgages, checking accounts, savings accounts, taxable investment accounts, IRAs, 401Ks, and employee stock options.

A muni bond fund is a mutual fund with the Tax Free box checked.

It has some built-in snapshots which you may or may not like, flexible portfolio views, and a configurable reporting system with some pretty good built-in reports.

Could it support some of these better? Sure!

Could some of the default settings be better? Probably.

Does it take into account all the intricacies of Federal and State taxes? No, that's what TurboTax is for.

Does it do a good job of consolidating multiple accounts and keeping track of your expenses and investments? I think so.

Dennis B

Dennis B said:

Hi ,,,,,Thanks for your reply. I didn't receive it and it was reinvested back into the tax deferred account from which it came. The dividends I receive on my 401k are similarly reinvested... So in my estimation it isn't really income until I remove it from the 401k. what's wrong with my thinking?
This is the "Income YTD" standard report contained in the Main View....

In the case of a 401K the dividend is not taxable income until it's withdrawn. I agree that it is income no question. My bigger issue is when I sell a security within a 401K and reinvest it within the same 401k....it is not or should not be considered as Income...eg Realized Income

Dennis B

Dennis B said:

Hi ,,,,,Thanks for your reply. I didn't receive it and it was reinvested back into the tax deferred account from which it came. The dividends I receive on my 401k are similarly reinvested... So in my estimation it isn't really income until I remove it from the 401k. what's wrong with my thinking?
This is the "Income YTD" standard report contained in the Main View....

It is not reported on a 1099 as I don't get the $$$

Dennis B

Dennis B said:

Hi ,,,,,Thanks for your reply. I didn't receive it and it was reinvested back into the tax deferred account from which it came. The dividends I receive on my 401k are similarly reinvested... So in my estimation it isn't really income until I remove it from the 401k. what's wrong with my thinking?
This is the "Income YTD" standard report contained in the Main View....

It is a asset transfer in my mind....sell one security and buy the same value of another within a 401k  ...where is the Realized Gain ...and why should it be reported as income???????

Dennis B

Bob L said:

Seems like income to me. Please provide what home page reports you mean.

An emphatic NO ....the size of my 401k did not grow because I sold one security and purchased another...it is an asset transfer ...but Quicken picks it up as Realized Gain and reports it as Income

q_lurker

Dennis B said:

Hi ,,,,,Thanks for your reply. I didn't receive it and it was reinvested back into the tax deferred account from which it came. The dividends I receive on my 401k are similarly reinvested... So in my estimation it isn't really income until I remove it from the 401k. what's wrong with my thinking?
This is the "Income YTD" standard report contained in the Main View....

@Dennis B: Before sale you have cost basis + unrealized gains. With the sale, those unrealized gains become realized gains (aka income, taxable or not). With the next purchase, you now have a new cost basis for your new holding that happens to include the total of your prior cost and the realized gains.

Unknown

If you format the account in question as a 401k or IRA, a tax report will report properly, but the other reports will report as income. I don't like it, but that's what Quicken does.

Jim_Harman

Dennis B said:

Hi ,,,,,Thanks for your reply. I didn't receive it and it was reinvested back into the tax deferred account from which it came. The dividends I receive on my 401k are similarly reinvested... So in my estimation it isn't really income until I remove it from the 401k. what's wrong with my thinking?
This is the "Income YTD" standard report contained in the Main View....

I can see why you would not want to think of internal transactions in your tax deferred accounts as income. Unfortunately that is not how the canned Income year-to-date snapshot is set up. 

Maybe the Taxable Income YTD snapshot will be more to your liking. Click on Customize for one of the views on the Home tab to see this.

Or take a look at the In/Out/What's left snapshot instead. This is available in QW 2017, I don't know about earlier versions.This snapshot includes only money coming and going from your spending accounts. For more info, search Help for "view in/out/what's left".   You can see what is included in the calculations by clicking on the gear at the top right then Details. Unfortunately this view is month-to-month not year to date.

If neither of those gives what you want, you will have to customize one of the reports, where you can decide which accounts, categories, and securities to include, and select Year to date for the date range.

NotACPA

Bob L said:

Seems like income to me. Please provide what home page reports you mean.

What are the Tax attributes set for your 401K?  TOOLS, Account List, click Edit across from the name of your 401k.  What button is selected for "Tax Deferred"?

Also, reports is as income WHERE?
And, it IS income.  You just don't accept the difference between Taxable income and non-taxable income.  But BOTH are income.