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How to handle ira distribution transactions downloaded from broker

Ellary Kahan

I just requested an ira distribution from my finance company. I needed $1000 and I wanted 20% withheld for taxes so I took out $1275.
The company downloaded 2 transactions.One (soldx) for the sale of the mutual fund shares for the amount of $1275 and another (MiscExp) for the taxes in the amount of $275 resulting in $1550 transferred to the associated cash account.
How should this be corrected?

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Accepted answers

NotACPA

I would have combined q_lurker's first 2 bullet points into a single "WithdrawX" action (by directing the proceeds to my non-retirement account in the sale transaction), but otherwise I concur.

In fact, I did this just this morning.

All comments

NotACPA

Record a Sale, in your IRA account for $1,275 and transfer the funds to your bank account.

In the bank account register, SPLIT the transaction and leave the $1275 alone ... but add another line in the split for -$275 (note the minus sign). Use a Tax category for this split line. Then use the adjust button in the split to reflect the $1000 that you actually received in your bank account.

Delete, in the IRA account that $275. Q can't record tax withholdings in Retirement type account.

q_lurker

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

Ellary Kahan

This helps. But in my case the proceeds of the Mutual Fund sales are deposited in my checking account (real world) but are deposited in the IRA account's associated cash account in QWin, which still has the IRA designation. From there I simply transfer to my checking account. So should I handle it as described in q_lurker's post??

q_lurker

Pay more attention to what happened in the real world than the downloads from the brokerage. They do not always get the downloads right.

If in the real world, the broker sold $11275 of mutual fund, paid $275 to Feds, and transferred $1000 to your checking, in Quicken I would have

Sold $1275 of mutual fund (cash to IRA cash)
Transferred $1275 from IRA cash to Checking (Deposit transaction in Checking)
Edited Checking deposit to a split category with the $1275 from IRA and $275 to Feds, now reduced (adjusted) to a net $1000 deposit.

I think that is what the FAQ post is saying applied to your case and what NotACPA was saying.

NotACPA

I would have combined q_lurker's first 2 bullet points into a single "WithdrawX" action (by directing the proceeds to my non-retirement account in the sale transaction), but otherwise I concur.

In fact, I did this just this morning.