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Realized gain loss on tax report

Does anyone know how to handle Buy/Sell transactions in a 401k retirement account when its just a transfer of one share class to another? I have them recorded as regular Buy/Sell transactions and share/value balances all reconcile. However, now that I am creating my yearly review report, I am seeing Realized Gain/Loss events - since they are not true to report on my tax filing, how can I adjust that they do not populate - but it retains the RGL events if and when they are applicable? I was thinking tagging it as transfers, and excluding from. the report.

Thank you

Answers

  • jacobs
    jacobs SuperUser, Mac Beta Beta
    If it's in a 401k account, you shouldn't be seeing any Gains or Losses on the Tax report. All the money in the account is tax deferred, and you'll pay tax on it when you take it out, so the distinction of what's a capital gain (versus dividends or other sources of income) doesn't really matter, right?
    Quicken Mac Subscription • Quicken user since 1993
  • Robert Lynch
    Robert Lynch Member ✭✭
    I understand that, but the RGL category is pulling into the reporting. Unsure why.

    The transactions are straight buy/sell. Is there different transaction type to account for it differently?
  • Robert Lynch
    Robert Lynch Member ✭✭
    Also I should note, I’m using the tax schedule report.
  • jacobs
    jacobs SuperUser, Mac Beta Beta
    @Robert Lynch Just to be sure, I'm assuming that your 401k account is showing up under the Retirement subheading in the left sidebar? I just want to make sure it's correctly coded in Quicken to be recognized as a retirement account and not a regular brokerage account. 

    I don't know why any gains would be showing on your Tax Report for gains in a non-taxable account, but…

    I just re-read your original note and see that this was for moving shares from one class of security to another. I have this periodically at Vanguard, with a switch from Investor to Admiral shares of a fund, or one fund merging into another. In those cases, instead of Sell and Buy transactions, I have used Remove Shares and Add Shares. This doesn't generate any gains in the Tax Schedule. And since it's a transaction in a tax-deferred account, capital gains are irrelevant because everything in the account will be taxable when it's eventually withdrawn.

    That said, I don't really rely on the Tax Schedule report for doing my taxes; I use the 1099s from the brokerages. For one thing, all my mutual funds use average cost basis, and Quicken Mac maddeningly only supports FIFO or LIFO -- so it can't possibly calculate my capital gains correctly for mutual funds. And rather than worry whether I have anything coded correctly in Quicken, or whether there's any bug in Quicken, I'm simply using the definitive source document for tax purposes. I know other people do a lot more trading of stocks and bonds rather than funds, and may find Quicken indispensable for tracking those gains; I'm just sharing that I don't find it worth much of my effort to try to get Quicken's Tax Schedule report to be right when it can't be without Quicken supporting the same cost basis method as most of my investments.
    Quicken Mac Subscription • Quicken user since 1993
  • Robert Lynch
    Robert Lynch Member ✭✭
    Hi Jacobs - thank you. This makes sense for share class changes. One last question - when management fees are charged to my account, I am using a misc expense & a sell transaction. How would you handle this in quicken?

    Lastly, yes the account is under the retirement section. I do not use the investment tracking for any capital events. I am more asking these question so in future if I do decide, I have this setup properly to utilize.

    Thanks again.
  • jacobs
    jacobs SuperUser, Mac Beta Beta
    My way of figuring these things out is to try to make my accounts in Quicken mirror my real-world accounts as much as possible. For a management fee on your account, where is the money coming from? If the broker sells a portion of one of your securities to fund the fee, then yes, you'd have a Sell Transaction (which creates cash), followed by a Payment/Deposit transaction (which uses cash) to record the payment to the Brokerage categorized to Bank Charges or whatever account you use for tracking such fees.
    Quicken Mac Subscription • Quicken user since 1993
  • Robert Lynch
    Robert Lynch Member ✭✭
    Thanks Jacob! This is all very helpful.
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