Conversion from Quicken Mac 2007 to Quicken for Mac Deluxe 2019 v5.11

dgsimm

I recently purchased Quicken for Mac Deluxe 2019. The conversion of my Quicken Mac 2007 files went smoothly.  However, my accounts had a mixture of taxable and non-taxable (IRA) securities.  The conversion process did not preserve the categories of non-taxable income for dividends, interest, long/short capital gains in the transaction registers.  Instead there appears to be only one category for those types of income.  Was this intentional and if so why?  Also, on the securities detail screen, checking the box Tax Free seems to have no impact that I can see.  Please explain.

J_Mike

@dgsimm

To begin, let's clarify an important issue - that is that income (dividends, cap gains distributions, etc.) to a retirement account (IRA, 401k, etc) is not tax free, Rather, it is tax deferred. Taxes are deferred until you retire and start taking distributions. I am retired and taking retirement distributions - and I am paying taxes on income earned 10, 20, 30 years ago.

QMac uses the same income categories in both taxable and tax deferred accounts. Example; QMac uses the same Dividend category whether the security is held in a taxable account or a tax deferred account. If you download, your FI likely reports it the same way; i.e., A Dividend is a Dividend regardless of the type of account.

QMac  distinguish between taxable and tax deferred income at the account level as opposed to the security level. If you examine the customization settings for QMacs' Tax Schedule Report, you will find that the default settings include only taxable accounts and exclude tax deferred accounts.

QMac does have a provision to mark a security as Tax Free. This is intended for securities that are truly tax free such as a municipal bond fund. The Tax Free attribute is not intended to distinguish between taxable and tax deferred holdings.

Reading your post, it seems that you may have been using a separate set of income categories for taxable vs tax deferred accounts. This is not necessary for tax reporting purposes. If truly desired, you can continue to do this but  the recategorizing will be strictly a manual operation and add to the workload of tracking your investments.

jacobs

dgsimm said:

However, my accounts had a mixture of taxable and non-taxable (IRA) securities. 

Just to make sure we're all on the same page here... In Quicken 2007, as in Quicken 2019, non-taxable IRA assets are -- or should be -- tracked as separate accounts from regular, non-retirement accounts. There is not a "not-taxable IRA security", as you wrote; there are not-taxable IRA accounts (in real life, as well as in Quicken) which have one or more securities. Is that the way you have your accounts set up? If so, the same Quicken categories for investment activities apply to both the retirement and non-retirement accounts, and Quicken knows not to include income in the retirement accounts in the Tax Report. 

And, as J_Mike wrote above, there are also non-taxable securities, like certain tax-free bond funds, which might exist in retirement or non-retirement accounts. The Tax Free check box on the securities detail screen is to identify such securities.

Quicken_Tyka

Hello Dgsimm,

What types are the transactions that are missing the category?

In the 2019 version, the only investment 'Type' transaction that can have a category is the Payment/Deposit type.

As seen below, all other transaction 'Types' don't have the ability to have a category.



This is most likely why the categories are now missing.  The only way to change this is to change the type to a Payment/Deposit and give the transaction the desired category.

Selecting whether or not a security is Tax-free will determine whether or not it's shown on the Tax Schedule Report.  If selected to be Tax-Free this will not show in any way on the Tax Schedule Report.



Hopefully, this clarified some things, let us know if you have any other questions!

-Quicken Tyka

J_Mike

@dgsimm

To begin, let's clarify an important issue - that is that income (dividends, cap gains distributions, etc.) to a retirement account (IRA, 401k, etc) is not tax free, Rather, it is tax deferred. Taxes are deferred until you retire and start taking distributions. I am retired and taking retirement distributions - and I am paying taxes on income earned 10, 20, 30 years ago.

QMac uses the same income categories in both taxable and tax deferred accounts. Example; QMac uses the same Dividend category whether the security is held in a taxable account or a tax deferred account. If you download, your FI likely reports it the same way; i.e., A Dividend is a Dividend regardless of the type of account.

QMac  distinguish between taxable and tax deferred income at the account level as opposed to the security level. If you examine the customization settings for QMacs' Tax Schedule Report, you will find that the default settings include only taxable accounts and exclude tax deferred accounts.

QMac does have a provision to mark a security as Tax Free. This is intended for securities that are truly tax free such as a municipal bond fund. The Tax Free attribute is not intended to distinguish between taxable and tax deferred holdings.

Reading your post, it seems that you may have been using a separate set of income categories for taxable vs tax deferred accounts. This is not necessary for tax reporting purposes. If truly desired, you can continue to do this but  the recategorizing will be strictly a manual operation and add to the workload of tracking your investments.

jacobs

dgsimm said:

However, my accounts had a mixture of taxable and non-taxable (IRA) securities. 

Just to make sure we're all on the same page here... In Quicken 2007, as in Quicken 2019, non-taxable IRA assets are -- or should be -- tracked as separate accounts from regular, non-retirement accounts. There is not a "not-taxable IRA security", as you wrote; there are not-taxable IRA accounts (in real life, as well as in Quicken) which have one or more securities. Is that the way you have your accounts set up? If so, the same Quicken categories for investment activities apply to both the retirement and non-retirement accounts, and Quicken knows not to include income in the retirement accounts in the Tax Report. 

And, as J_Mike wrote above, there are also non-taxable securities, like certain tax-free bond funds, which might exist in retirement or non-retirement accounts. The Tax Free check box on the securities detail screen is to identify such securities.

dgsimm

Thanks everyone for your comments.  My initial inquiry was simply to get an explanation for why the conversion process worked as demonstrated in the attached examples.  The lower report shows sample transactions in Quicken 2007.  Notice the category is Div Income NT.  After conversion to Quicken 2019 the same transactions show below:

So in retrospect, I should have never mixed taxable and "currently non-taxable" securities in the same account.  With the new feature in V5.11, I have removed the IRA securities and transferred them to new Retirement Accounts, which I believe is in line with the recommendations some of you have made above.  That should clarify things going forward, but unfortunately the transaction history still resides in the "comingled" account and thus the Tax Schedule report for 2018 shows the dividends for the IRA securities since they were not in a Retirement Account during that time period.