Moving 401k from one account to another

tdbeeze

Recently the company I work for moved my 401k from one financial company to another. The old company sold my shares and transferred the cash to the new company. Then the new company reinvested in funds of my choice. How can I make this transfer without realized gains showing up in taxes?

Jim_Harman

When accounts in Quicken are marked as Tax Deferred, they are excluded by default from the Tax planner and tax reports.

You have still realized the gains but they do not affect Quicken's tax computations.

tdbeeze

Thanks. Made the change. Works great for taxes, except I do want all but the transfer (realized gain) to be in taxes (normal sales with gains/losses, dividends, interest, etc). Also, selling the funds and transferring the cash, then reinvesting in the new company gives some big amounts in some reports which makes them difficult to understand. Perhaps I could keep everything in one account and find a way to convert the investments from 3 old mutual funds to 4 new mutual funds without selling/buying anything. This way, everything would remain invested without any gains, deposits, etc. Is there a way in quicken to convert part of a mutual fund to another mutual fund so I can divide the 3 old funds into 4 new funds?

Jim_Harman

I am not sure which reports you are looking at, but generally you want the transactions in Quicken to match what happened in real life, and you do not want transactions that occur inside or between your tax deferred accounts to be included in tax reports.

If you want to see your performance over a period that includes the transfer, I suggest you use the Investing Performance Report and include both the old and new accounts. The transfer between the accounts should not affect the performance.

If for some reason you want to see what your tax situation would have been if the accounts were not tax deferred, you can customize the tax reports to include those accounts. 

Jim_Harman

Also you can keep it all in one account in Quicken if you want, including the Sells of the old securities and the Buys of the new ones.

If you do this and you are downloading transactions, you will of course have to deactivate the old online account and activate the new one. You will also have to delete any downloaded transactions that moved the money from the old account to the new one.

tdbeeze

Thank you Jim
This has been a tremendous help in understanding the difference between what I thought I was supposed to be seeing in the reports and the actual purpose of the reports. The Performance Report helped a lot! With this new perspective, I decided to enter a SoldX (sell and transfer) in the old 401k account transferring the funds to the new 401k account (which is exactly what happened). Then Bought the new shares in the new account. Of course this caused big realized gain and some big Investments/Returns between the accounts which no longer confuses me. For taxes, I just did an adjustment for the realized gain only for the transfer (which my company tells me will not be taxed). Thanks again for helping me understand what's really happening under the hood.

Jim_Harman

If you followed my directions and both accounts are tax deferred, you should not need to make any adjustments.

tdbeeze

Made the change on my retirement accounts and it removed the realized gain like you said. No more need to adjust. Thanks