How do I set up an Ameriprise Variable Universal Life annuity under investments?

lmreyman

My investment is with Ameriprise. Quicken will import all other investment types correctly. I can't find a way to set this investment up that I've had for several years so selecting a "buy" doesn't seem to work.

jacobs

So I think I would treat this like you would an IRA...

• Create a manual investment account for the annuity. I would use a Type or Traditional IRA, even though it isn't, because using a retirement account type will prevent income from showing up on the Tax Schedule report. 
• Create a security for the annuity, which you'll always transact at $1 share.
• Establish your current annuity value with an Add Shares transaction for the value of the annuity. That is, if its current value is $12,345.67, you'd add 12,345.67 shares at $1.00.
• Each month (or whatever intervals you want to update the value), record a Reinvested Dividend in your security for the increase in value. If the annuity's value is now 12,545.67, you'd enter a Reinvest Dividend transaction for $200 at $1/share.

This will show your value correctly in the sidebar and portfolio views, it will avoid dealing with any cash balance, and avoid will avoid showing any taxable income in the Tax Schedule report. When it comes time to receive.

NotACPA

Please explain what is a "UVL annuity" and how it differs from any other annuity.

Also, I've asked a moderator to change your ID so that it's NOT your email address.  This is a public forum, and, as is, spammers could harvest your email.

lmreyman

TYPO; sb VUL (Variable Universal Life) annuity. Many different kinds of annuities. Most simple form is you pay a monthly premium for a fixed set of equal payments sometime in the future. Length of payout depends on the annuity. The VUL has an investment piece that enhances the fair value of the annuity so it increases in value over the years held to maturity or annuitization. At any rate, Quicken for Mac isn't able to pull this asset into my data from Ameriprise Financial Services as it does equities.

jacobs

Someone else may have a different take on it, but I'd think you'll need to manage this manually. Fortunately, it's likely only one transaction a month, and you could do it quarterly or annually if you aren't concerned with seeing the "live" results in Quicken.

Each month, you're paying money into the annuity, right? Do you currently have it set up as an investment account? Another option is to set it up as an asset account, although in Quicken Mac it will show up in the sidebar under Assets rather than Investments. If it's an asset account, then each month's payment from your checking account is simply recorded as a transfer to the asset account. then each month, quarter year or whatever intervals you want, you can make an adjustment entry to reflect the investment income in the annuity. If you use the category Adjustment, this will not show up on any reports, as you don't want it to be income or expense.

If you set it up as an Investment account, you'll need to record a Buy transaction each month with the cash you transfer to the account from checking. But what security? What's it's price? You have to create a security. Unless you get some sort of tracking from Ameriprise of the number of "shares" and a price valuation per share, you could record everything at a share price of $1. So a monthly payment of $250 to the annuity would be 250 "shares" at $1. At the end of the month, if Ameriprise says your $250 is now worth $275, you could record a Reinvest Dividend of $25 shares at $1. in this way, the value of you annuity will be reflected in the investment section of Quicken. But it's a little more work. And when the time comes from you to receive payments from the annuity, you'll be doing SELL transactions followed by Transfer transactions.

When you're receiving money, the transfer gets tricky in Quicken Mac assuming you want to record the payment as taxable income. In this regard, it's the same as a withdrawal from an IRA, which is something Quicken Mac doesn't have a feature to specifically handle. If you're receiving money, let us know and I can show you the trick to create the transfer and recognize the transfer as income. 

@NotACPA is a Quicken Windows user, but he's got more experience with annuities than I do, so hopefully he'll chime back in about how he'd record the annuity purchases.

NotACPA

Are you told what individual securities are held in the account, or just the current value?  What precise info does Ameriprise send you (monthly?) about the account?

My initial take, pending your reply to my questions, is that I'd set this up in it's own Investment type account (not commingled with other securities) and create an artificial security with a name of your choosing.  I'd value this security at $1 per unit, and those monthly premiums would purchase these units.

BUT, does any portion of the monthly premium go to insurance costs, or any other non-investment type costs?

lmreyman

First thanks for the responses. A couple of points to consider. There are no more premiums being paid into this annuity nor will there be. I’m a retired CPA so I’m familiar with how annuities should work from an accounting standpoint. My objective is to set this account up manually by entering it’s original cash basis as a “beginning” balance without affecting any cash balances; only equity. From that point on I want to update any realized (but not recognized) gains or losses thus reflecting current value on a monthly basis. So far I haven’t discovered how to do this without affecting cash balances in some manner.

jacobs

I'm a little confused about "realized but not recognized" gains. Do you mean realized gains which are not taxable (e.g. the same as, say, a reinvested dividend in an IRA account)?

lmreyman

Yes that is what I mean. That is one of the advantages of annuities; such earnings are not taxed until distributed. I am not and don’t plan on any such distributions being made in the foreseeable future.

Ps56k2

lmreyman said:

TYPO; sb VUL (Variable Universal Life) annuity.

updated topic title to better reflect actual Q&A - and typo

jacobs

So I think I would treat this like you would an IRA...

• Create a manual investment account for the annuity. I would use a Type or Traditional IRA, even though it isn't, because using a retirement account type will prevent income from showing up on the Tax Schedule report. 
• Create a security for the annuity, which you'll always transact at $1 share.
• Establish your current annuity value with an Add Shares transaction for the value of the annuity. That is, if its current value is $12,345.67, you'd add 12,345.67 shares at $1.00.
• Each month (or whatever intervals you want to update the value), record a Reinvested Dividend in your security for the increase in value. If the annuity's value is now 12,545.67, you'd enter a Reinvest Dividend transaction for $200 at $1/share.

This will show your value correctly in the sidebar and portfolio views, it will avoid dealing with any cash balance, and avoid will avoid showing any taxable income in the Tax Schedule report. When it comes time to receive.

lmreyman

Jacobs, thanks for your answer. This one seems to work. Thanks also to all others who responded to my issue. It was appreciated.