How to record distributions from an IRA

Jim Thompson

I have an IRA with 4 mutual funds in it.  The 4 mutual funds are included in the investment account for the IRA.  I receive regular distributions from each fund in the form of paper checks, which I then deposit in my bank.  The money for these distributions comes from liquidating shares in the funds.  How do I record these transactions?

Jim_Harman

Your 4 Sell transactions will put the proceeds in the cash balance of the investing account, totaling the amount of the distribution. You can then enter a "Cash transferred out of account" to move the gross proceeds to your checking account.

Any withholding should be entered as a negative amount in the receiving end of the transfer in your checking account, so that the net amount is deposited.

Bob_L

Wen you transfer the cash out of your IRA account, please be sure to do it In quicken via a deposit in your checking account rather than by entering a withdrawal in the IRA.  The deposit transaction in checking will be a split with the first line being a transfer in from the IRA for the gross amount, followed by split lines for any withholding amounts.  

You should also also edit your IRA account and click on tax schedules.  Set transfers out to gross taxable distributions.

Bob_L

When you click on enter transaction, pick reinvest income and it will bring up a dialog box that includes options for dividends, st gains, lt gains, etc.

J_Mike

For QWin, see this FAQ:

faq-best-way-to-handle-distributions-from-ira

Jim Thompson

Thanks.  I read through this and found it helpful, but I still have some questions.  Here goes:

I have an IRA that consists of 4 funds.  I have created a Q account for the IRA.  I also created a category with the same name as the account (“Putnam IRA”).  Within the account, using the box “Enter Transactions,” I entered a “starting balance” for each fund; the funds are displayed when I click on “Holdings” (pretty cool).

 I am receiving distributions in the form of paper checks from each fund at the same time each month.  I am depositing these checks into a checking account.  I cannot receive downloads from this IRA’s FI.  The FI monthly statement shows, for each fund and each distribution, the # of shares sold, sale price, and proceeds for both Fed tax withholding and taxable distribution (the sum of which, obviously, is the total gross distribution; no State tax withholding).

Based on the discussion, here are my further questions:

I assume I start by entering the respective fund transactions, and I it seems clear that I start with transactions called “Sell-Shares Sold.”  This is where things get fuzzy for me:  what is/are the next step(s)?  And how do I ultimately get to a single deposit transaction into the checking account?

Jim_Harman

Your 4 Sell transactions will put the proceeds in the cash balance of the investing account, totaling the amount of the distribution. You can then enter a "Cash transferred out of account" to move the gross proceeds to your checking account.

Any withholding should be entered as a negative amount in the receiving end of the transfer in your checking account, so that the net amount is deposited.

Bob_L

Wen you transfer the cash out of your IRA account, please be sure to do it In quicken via a deposit in your checking account rather than by entering a withdrawal in the IRA.  The deposit transaction in checking will be a split with the first line being a transfer in from the IRA for the gross amount, followed by split lines for any withholding amounts.  

You should also also edit your IRA account and click on tax schedules.  Set transfers out to gross taxable distributions.

Jim Thompson

Thank you much Jim Harman and Bob L.  Another question about fund transactions:  on my FI statement, in addition to transactions called "FED TAX WITHHELD" and "RETIREMENT DISTRIBUTION" (which I think I know how to handle now), there are also:  "ST CAP GAIN," "LT CAP GAIN," and "DIV REINVEST."  For the latter, I see two transaction categories that might apply:  "Reinvest-Income Reinvested" and "DIV-Stock Dividend (non-cash)."  I'm assuming that I would use "Reinvest," because the statement shows a share price and amount invested for the "DIV REINVEST," no?
 What transaction category to use for the other two, and any other pertinent details?

Bob_L

When you click on enter transaction, pick reinvest income and it will bring up a dialog box that includes options for dividends, st gains, lt gains, etc.

Jim Thompson

I see it, great.  Thanks much once again!