When bond matures how should you categorize transaction downloaded from broker

A Miller

I am using Win10 Quicken Premier R32.10. When a bond matures, it is reported as a deposit by my broker and broker calls it a redemption. So, as a deposit it reports as Income and is categorized as Other Inc then it shows up as income in my Spending tab, as if it's Income I have made. It seems as if it needs to be recorded as category _RlzdGain. In fact some dividends that come in as Deposits from this broker also get categorized as Income in my Spending tab. Now the _RlzdGain does not seem quite right either for the bond, since it's not the whole bond value that is a gain, just the difference from what the bond was purchased should be _RlzdGain. How should one deal with Bond redemptions?

Rocket J Squirrel

Use a Bonds Sold transaction, replacing whatever transaction downloaded from the broker.

A Miller

Ok, thanks. But how to characterize them so they are not viewed as Income (wages) rather than as investments. Categorizing them as _RlzdGain, they still show up as Income in the Spending tab. Why?

Rocket J Squirrel

A Miller said:

But how to characterize them so they are not viewed as Income (wages) rather than as investments. Categorizing them as _RlzdGain, they still show up as Income in the Spending tab. Why?

I don't know. I don't see any of my bond redemptions under Spending. I just spent several minutes tweaking settings in Spending trying to make them appear, but they don't. Can you attach a screen shot showing what you're seeing?

copleym

Here's what I do by way of example. I purchased a $1000 T-bill for the discount price of 975. When the bond matures, I delete the downloaded transaction 'redemption' from my broker to avoid the improper realized gain and income issue you're having. Instead, I use the Return of Capital transaction to return my original 975 investment. I then enter a new interest transaction for $25, to capture the investment interest income properly in my investment income report. There is no capital gain realized upon maturity—only a return of principal invested at par value. I then remove the T-bill 10 shares (10 x 100 =1000) shares from my register using the Remove shares transaction. So in summary--- I buy the bond at a discount to par value; it matures at par value and I get my original investment back plus interest (difference between par and discount price). The bond no longer exists so I remove the originally recorded shares from the account. The interest earned from the bond is properly captured in my quicken investment income report.

copleym

By the way, you can realize a capital gain/loss if you sell the bond before it matures at whatever price it is at the time.

A Miller

Thanks copelym

markus1957

FWIW, Income reported in the Spending tab is not Wages. It's a balance sheet showing Income (money flowing in when selected in pull-down menu) and Expense (Spending, aka; money flowing out when selected in pull-down menu) for the account registers selected to display in the tab.

Also, bond purchases/redemptions should be handled per @Rocket J Squirrel instructions.

The @copleym method as described will leave you with outstanding bond shares of zero value. Quicken is designed to use the Buy Bonds/Sell Bonds investment actions.