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Cannot change transfer to checking from investment account to income. This is badly misrepresenting

Unknown
Unknown Member
edited January 2019 in Investing (Windows)
Cannot change transfer to checking from investment account to income. This is badly misrepresenting income. Any ideas on resolving this.

Comments

  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited October 2018
    Set the tax attributes of the Investment account.

    BUT, normally, investment income is recorded in the investment account ... and a transfer to your checking account is NOT income ... because it doesn't make you any wealthier than you were before the transfer. 

    In a transfer, your Investment account goes down by $X and your checking account goes up by the same amount.  I.E., you have exactly the same wealth as you did before the transfer.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    edited October 2018
    A transfer is generally not treated income as you're simply moving funds from one account to another.  Interest or a dividend would be examples of income received in a brokerage account.  
  • William Prendergast
    William Prendergast Member ✭✭
    edited January 2019
    I'm assuming that your concern about uncharacterized "income" is actually "taxable income" not being recognized.  If that's the case, I'd say, technically, the TRANSFER from an investment account to, say, a checking account is NOT "income."  The income occurred when the funds GOT INTO the investment account, whether by dividend, capital gain or whatever.  So, as far as "taxable income", that was realized when you got it, not when you transferred it to another account.  

    Of course, you might be referring to a tax sheltered "investment account" (IRA, 401-K, etc.).  In that case, of course, DISTRIBUTIONS from your tax sheltered account to your checking, savings, whatever, ARE taxable income.   I have that problem myself  with my IRA (I'm retired).  But I only take taxable draws once or twice a year from my IRA and those are easy enough to just manually add in to my tax estimator or tax return software.  I take account of those in Quicken by having a special tag for "Taxable IRA draws", which I print out as a report at tax time.

    So, does that help?  Or have I mis-understood your problem?
  • Unknown
    Unknown Member
    edited January 2019
    Thanks for your responses...  I am also retired. These are ongoing monthly distributions from multiple brokerage accounts. I am downloading from both the brokerage account as well as my bank. Since these are automatically deposited from brokerage to bank account they then show up there and Quicken categorizes them as transfers. When I try to change the category of the transaction in my checking account to income then Quicken indicates that if I change the category then the transaction will be deleted.
  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    edited May 2020

    Thanks for your responses...  I am also retired. These are ongoing monthly distributions from multiple brokerage accounts. I am downloading from both the brokerage account as well as my bank. Since these are automatically deposited from brokerage to bank account they then show up there and Quicken categorizes them as transfers. When I try to change the category of the transaction in my checking account to income then Quicken indicates that if I change the category then the transaction will be deleted.

    If these are distributions from a tax-deferred account, you may want to verify that the transfers out of the account are assigned to the appropriate tax line.  Open the investment account, press Ctrl + Shift + E, and select Tax Schedule.  For example, a traditional IRA should have 1099-R: Total IRA gross disttrb. selected.
  • splasher
    splasher SuperUser ✭✭✭✭
    edited January 2019
    Isn't this the situation where the transfer from the tax-deferred account has to be to a cash account for the proper tax categorization?

    If so, then I suggest doing the transfer from investment account to cash and then from cash to checking.
    -splasher  using Q since 1996 -  Subscription  -  Win10
    -also older versions as needed for testing
    -Questions? Check out the  Quicken Windows FAQ list
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited November 2018
    It sounds like the issue here is not income for tax reporting purposes but for budgeting purposes.

    Often people want to view the cash flows to and from banking accounts as "income" and "expenses." When money from a paycheck or Social Security is deposited in a checking account, Quicken shows it as income, but when the money comes from an investment account it (correctly) shows as a transfer.

    I think you can do this by handling your payments and customizing your reports carefully. The general idea is as follows. This is for QWin 2019, other versions may work differently.

    -- When you pay for things that you want to include in this analysis, use a spending account, don't for example write checks on the money market fund in an investment account.

    -- When you set up reports to see these cash flows, customize them so that the Accounts include just those you use to pay your expenses (typically bank and credit card accounts), and the Categories include everything BUT the bank and credit card accounts.

    With this setup, and looking for example at the Income/Expense by Category report, transfers from your investment accounts will show in the Income section but transfers between spending accounts, to pay credit card bills for example, will not be included.

    [Edit] Note that the Itemized Categories report is not so useful for this purpose, because it puts all the transfers in a section by themselves at the bottom.

    Is this what you are trying to accomplish?
    QWin Premier subscription
  • Unknown
    Unknown Member
    edited May 2020

    Thanks for your responses...  I am also retired. These are ongoing monthly distributions from multiple brokerage accounts. I am downloading from both the brokerage account as well as my bank. Since these are automatically deposited from brokerage to bank account they then show up there and Quicken categorizes them as transfers. When I try to change the category of the transaction in my checking account to income then Quicken indicates that if I change the category then the transaction will be deleted.

    if the account the money is coming from is not tax exempt, then then the transfers aren't income.  your account at the institution would also include some type of cash account, a money market or some similar type of account which is basically just cash  the way money gets into the "cash" account is either through earnings such as dividends and interest or security sales.  either way the income is recorded in the investment account and your just transferring it. 

    money from a tax-deferred a/c is explained above.


    if neither of these situations apply then perhaps you could tell us what type of account the money is coming from   
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited May 2020

    Thanks for your responses...  I am also retired. These are ongoing monthly distributions from multiple brokerage accounts. I am downloading from both the brokerage account as well as my bank. Since these are automatically deposited from brokerage to bank account they then show up there and Quicken categorizes them as transfers. When I try to change the category of the transaction in my checking account to income then Quicken indicates that if I change the category then the transaction will be deleted.

    I.E., WHY are the funds NOT income when received in the investment account? 

    Because, since they are income in the investing account, you're requesting that they be double-counted ... once in the investment account and again when transferred to checking.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Unknown
    Unknown Member
    edited May 2020

    Isn't this the situation where the transfer from the tax-deferred account has to be to a cash account for the proper tax categorization?

    If so, then I suggest doing the transfer from investment account to cash and then from cash to checking.

    I don't think that works.  Need to have it show up as an income item on tax planner and also show as deposit to checking account.  if you show it as an income or expense you can't show it as a transfer to a bank account.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited May 2020

    Isn't this the situation where the transfer from the tax-deferred account has to be to a cash account for the proper tax categorization?

    If so, then I suggest doing the transfer from investment account to cash and then from cash to checking.

    Micki,
    What type of investing account are you transferring from? If it is a taxable account, the income should show in the tax planner when it is received in the investing account. If it is tax deferred, like an IRA or 401k, the transfer should show as 1099R income.

    This is different from "income" for budgeting purposes. In that case you may want to think of the transfer to your checking account as income, and you can set up your budget and spending reports to do that, as explained below.
    QWin Premier subscription
  • ColinGruchy
    ColinGruchy Member ✭✭
    edited May 2020

    Thanks for your responses...  I am also retired. These are ongoing monthly distributions from multiple brokerage accounts. I am downloading from both the brokerage account as well as my bank. Since these are automatically deposited from brokerage to bank account they then show up there and Quicken categorizes them as transfers. When I try to change the category of the transaction in my checking account to income then Quicken indicates that if I change the category then the transaction will be deleted.

    Perfect! Thanks! I was trying to figure out a way to get the transfers from my RRSP account to my chequing account to show as taxable income on the Tax Summary report and changing the Transfers Out option on the Tax Schedule Information to T1 General: RRSP Income did the trick.
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