How do you categorise a lump sum of cash deposited into an investment account?

andrewrollins

I entered a cash deposit into an investment account for the purpose of purchasing Investments. I categorized it as a deposit. However when I run a report that shows investment income, it is showing up in Income as uncategorized income. It is not income but a capital injection. Also, if cash is withdrawn from the investments account as a distribution to a Trust Company, it is showing up in reports as an uncategorized Expense. It is not an expense but a distribution.

Can anyone assist me as to the correct handling of these transactions and what categories or transaction types I should be using?

I am using Quicken for Windows 2019.

Regards
Andrew Rollins

Jim_Harman

Often a deposit to an investing account will come from one of your other accounts. In that case you can enter it as a transfer from the other account and it will not get a Category in Quicken. You are no richer or poorer beccause you moved money from one account to another.

Likewise if you are tracking the trust company account in Quicken you can record the money sent there as a transfer as well. If the trust company account is outside of the Quicken world then you might want to enter it as a Withdrawal and set up a special expense category that you can use to track that money.

You can customize reports to include or exclude the transfers or Income/Expense categories depending on your needs.

andrewrollins

Jim

Thanks for your comments. 

Unfortunately neither the Trust account or the account is managed by the Trustees and I don’t have it in Quickbooks.

 

Is there a way to handle these transactions without having to create other bank accounts in Quickbooks?

Andrew

NotACPA

Are you running  Quickbooks (as referenced in the comment immediately above) or Quicken?

AND, are these investment accounts in the same data file that the money is "coming-from/going-into".

Why is the "going-into" simply recorded as a Transfer? There should be NO category associated with it as you're neither Richer nor Poorer after the transfer.

andrewrollins

Correction, I am running Quicken 2019. They are not in the same data file. The issue is that Quicken treats these uncategorized receipts and payments as Income and Expenses in its reports for Investment Income.

Jim_Harman

We are talking about Quicken, not Quickbooks, right? They are different products.

I'm not saying that you need to create any additional accounts in Quicken. If the money is coming from or going to an account outside of the current Quicken data file, you should enter it as a Deposit or a Withdrawal with an appropriate Category. You can easily create new Categories - "Trust Account deposits" or whatever - to track this money if necessary.

andrewrollins

Thanks Jim. Are you allowed to create categories that are not Income nor Expense?

NotACPA

andrewrollins said:

Correction, I am running Quicken 2019. They are not in the same data file. The issue is that Quicken treats these uncategorized receipts and payments as Income and Expenses in its reports for Investment Income.

That would be because they ARE income in that data file that only contains the Trust accounts.  Likewise they ARE expenses when taken out.

Transfers wouldn't be income or expenses ... but you precluded that option when you set up the securities in separate files.

Jim_Harman

By default, the Investment Income report shows deposits to your investing accounts as income, using the Category you assigned in the Deposit transaction, and withdrawals as expenses, again using the category you assigned in the Withdraw transaction.

If you don't want these amounts included in the report, click on the gear icon at the top right of the report, click on the Categories tab, and un- select any categories you do not want included in the report.

q_lurker

Jim_Harman said:

...

If you don't want these amounts included in the report, click on the gear icon at the top right of the report, click on the Categories tab, and un- select any categories you do not want included in the report.

Indeed, if the underlying issue is the "Uncategorized" income and expenses, you can customize the Investment Income report to exclude "Not Categorized" transactions.  I would encourage you to fully review what is in that set that is then being omitted, just so you are sure about what is NOT being included.  It may be cleaner to use a specific category and exclude that specific one.  

NotACPA

andrewrollins said:

Thanks Jim. Are you allowed to create categories that are not Income nor Expense?

Sorry, but NO.  In Q, all categories are either Income or Expense.

andrewrollins

Thanks Guys for your comments. The comments were very helpful. I will make some modifications to what I am doing.

i consider this issue as resolved.

andrewrollins