Quicken for Windows
I did a Roth conversion with shares of 3 different ETFs being directly transferred from an IRA account to a Roth account. How do I account for the dollar amount of the conversion, so that it will show up as a taxable event inquicken?
If you haven't already, you may want to review:
I did see that discussion. However, the Super User Sherlock's link is nolonger valid. In addition, my IRA account does not have a linked cash account, as it is not offered as an option.
There is no need for a linked cash account, and you can ignore Sherlock's 8 year old dead link.
However I think the issue is that Quicken does not record the tax implications when shares are transferred between accounts as you describe. To capture the tax status of this transaction I think you would have to record this as follows:
-- Sell the securities in the traditional IRA account
-- Go to a banking account and record a Deposit with the split lines indicated in the link above. QPW used a dummy account that he called "Float" for this.
-- Buy the same securities in the Roth account. You can use the same date and price as the Sell.
I agree this more complicated than it should be. If you would like Quicken to implement a better way to record Roth conversions, please see and vote on this idea post
To vote, click on the small up arrow in the big blue box. Every vote counts!
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edited January 2020
I have a similar but maybe simpler approach
> Create a new cash account called "Rollover Cash Account"
> Enter each rollover as shares transferred. Quicken will do the share xfr the shares and do price per share accounting for you
Create new categories
Investments->_Rollover to Roth
Xclude Expenses-> Rollover Pseuo Cashout
Then you only need track and enter your total annual rollover amount (or you can make an entry for each rollover amount rather then total annual)
Enter the amount into Rollover Cash Account as category _Rollover to Roth
Then withdraw that amount as category Xclude Expenses->Rollover Pseudo Cashout. Rollover Cash Acct balance s/b zero
When you generate your income reports:
> Add the Cash Account to the total
> Uncheck the Xclude Expenses category so the withdrawals aren't counted
Yet another method for recording ROTH conversions...
For tax reasons, you need to keep ROTH accounts separate from regular IRA
My goal here is to preserve the total return and/or "capital gains" basis at any point in time so performance can be monitored. This is regardless of the taxability of accounts.
This scenario is for ROTH conversions where you maintain your investment in the same security.
Before entering any transactions:
* Remember security info in IRA before you remove it:
Cost basis, average cost, percent gain.
- Use the details of the first lot if a partial security conversion.
For the two transactions, put "ROTH Conversion" in the memo field.
* Do a remove shares in the regular pre-tax IRA.
- If a partial security conversion, use the first lot, for lot selection.
- Use the ROTH conversion date as the date of transaction.
* Do an add shares in the post tax ROTH IRA, same date as remove shares.
- The price paid per share comes from the average price per share and the total cost comes from the investment amount of the shares removed.
- The date acquired can be the ROTH conversion date too.
The above instructions assume you are not withholding any amount for taxes.
This procedure keeps prior dividends, etc with the old IRA account and starts off the new ROTH security fresh with a single lot and single entry.
Limitations of the above procedure:
* Where can I see the taxable income from the conversion in a report? You can't.
* You can see the ROTH conversion amount within a couple of cents by then using portfolio view group by account. Look at the ROTH account market value for the converted security lot on the "as of" date of the conversion.
* You can also run an investment report off the "ROTH Conversion" in the memo field to see each security converted, but not their full value at the time of conversion for the tax year. This report can remind you of each conversion, so you can make sure you have all tax forms at tax time.
Of course a ROTH conversion wizard would be better for all of this and improved investment reports too.
While this is another hack, I can't wait for Quicken to fix this. I needed to write all this down, since ROTH conversion(s) are done every year now.
To help get Quicken developers to make this better, make sure you vote on the Idea thread referenced above.
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