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Record Selling of IRA Shares with Federal Withholding

Mountainbreeze

When I sell $1000 worth of shares from my IRA (lets say it is 100 shares at $10/share), my broker withholds $100 for federal tax. I have the net proceeds of this transaction ($900) directly deposited to my checking account. How do I record the $1000 transaction with the appropriate number of shares and cost per share ($1000) but only transfer $900 to my checking account? Transaction type SoldX does not seem to allow this.

Also, how do I track that my broker has made a federal tax payment of $100 in my behalf?

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Roger M

I would enter this as 2 transactions. The first being a sale of the shares, with the gross proceeds ($1000) remaining within the IRA account (cash). Instead of using SoldX, open the account register, then click Enter Transactions button, then select Sell-Shares Sold.

The 2nd transaction will be a withdrawal of $1000, with $900 being transferred to your checking account, and $100 being assigned to the category "Tax:Fed", or whatever category you already have setup for Federal Income Tax payments. From the Enter Transactions button, select Withdraw, then setup a split transaction as below:

Roger M

Oh, and be sure that you have that tax category setup with a Tax Line Item for "W2:Federal Tax Withheld-Self". That way, the $100 tax payment transaction will be displayed on any tax related report that you run in Quicken.

Roger M

Bill, sorry, one more comment. If you want to track your broker tax withholding separately from your other tax withholding, then just setup a new Expense category called, for example, Broker Fed Tax Withheld, and assign the proper tax line item to it. Then, use that new category in the split Withdrawal transaction when you transfer the money out of the account.

Merry Christmas!

mshiggins

Bill, you may also want to review the FAQ post on this topic:

https://community.quicken.com/discussion/7072150/faq-best-way-to-handle-distributions-from-ira

Bob_L

As the FAQ, points out, you need to do the deductions by splitting the deposit side. If you instead split the withdrawal transaction, my experience is that you will not get what you want in tax reports,etc.

Mountainbreeze

Thanks to you both. This has given me exactly what I need.

Roger M

As the FAQ, points out, you need to do the deductions by splitting the deposit side. If you instead split the withdrawal transaction, my experience is that you will not get what you want in tax reports,etc.

Yeah, I neglected to realize that any withdrawal from a tax deferred retirement account would be a taxable distribution. Although, the FAQ states that having to use a Deposit transaction, instead of a Transfer, may be a bug. I wonder if it is, and if it has been fixed.

"3) It is important to use the Deposit transaction when
transferring to a taxable brokerage acct. QWin does not pick up the
taxable event [the distribution] if one uses a 'Cash transferred out'
transaction for some reason [bug?]."

Dom1

Using Quicken Premier 2016 R19.5 / Windows 10 Home

Is anyone aware of whether the suggestion outlined in the faq will work on the version I've noted above? I've tried entering numerous ways without success. I'm trying to execute a plain IRA withdrawal (not an RMD).

Thanks

NotACPA

Transfer the full $1000 of the sale to your checking account this can be done with a TRANSFER within the sale transaction.. In your checking account, SPLIT the transaction to show $1000 coming from the IRA and -$100 (note the minus sign) going to your tax category.

Q doesn't have the ability to record tax transactions in a retirement type account.

Dom1

Thanks NotACPA,

That looked like it was going to work but Quicken is looking for the number of shares being sold. In Vanguard CASH sit in the IRA MM account but in Quicken CASH just sit in cash (no MM/no shares). I guess I could create a fictitious buy transaction of the MM account and then sell it but not totally sure if I want to do that.

NotACPA

It sounds like you recorded a Sale transaction and then a WithdrawX. This could have been done in a single transaction in Q.

IF you're doing the WithdrawX, then the money is already going to your checking account ... and you'd still split it there. In the WithdrawX, remove the entire $1000.

Dom1

Correct, at times (like this time) I may wish to sell fund shares but still leave the proceeds in the IRA. Then at some later point withdraw some of this cash to my checking account.