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Investment Withdrawal vs Misc Exp

Catherine Shenoy

When I enter either a withdrawal from my investment account because of a brokerage fee, I want to distinguish it from a withdrawal that goes to me to spend. I'm trying to figure out if I should use Withdraw under Cash Transactions or should I use Miscellaneous Expense under Investment Transactions.

I read the discussion about specifying whether a transaction such as an Investment Advisors Fee affects performance. I have set a Category up as Investment Expense and checked the box so that it affects investment performance. However, I just did this and now I have to go back and fix old transactions, so they are all consistent. When I am withdrawing for personal expenses, I enter the category as the account it's being transferred into.

I haven't taken too much out for retirement yet, but I do have several months to fix. I haven't been consistent because I don't understand which transaction to use.

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Sherlock

You should use Miscellaneous Expense under Investment Transactions as the MiscExp allows us to identify the security associated with the expense.

Catherine Shenoy

There is no associated security. It comes out of cash.

Jim_Harman

If there is no security, then it doesn't really matter whether you us Withdraw or MiscExp. You might still want to use MiscExp for the fees, to make it easier to track them separately.

q_lurker

I agree in this case, the two are effectively the same. I'll use MiscExp for transactions that are clearly security-related, like foreign taxes paid. Not your case here.

You do want to be consistent on how you assign the category. Personally, I am biased toward the MiscExp simply because this is an expense you are paying out of that account. But your category assignment should also be making that clear.

Sherlock

Catherine Shenoy said:

There is no associated security. It comes out of cash.

Then use a Withdraw as it will allow you specify a payee.

Note: Specifying a payee on an MiscExp transaction should convert the transaction into a Withdraw.

q_lurker

Sherlock said:

Note: Specifying a payee on an MiscExp transaction should convert the transaction into a Withdraw.

Head scratching?!?.. Didn't know you could do that, but you can when viewing the register. And the reverse holds true - Have a Withdrawal transaction with a Payee specified. Delete the Payee and it becomes a MiscExp transaction. Deleting the payee from a WriteChk transaction also converts it to a MiscExp transactions, but it keeps the Number field.

OK, the program does that. But why? That's my head scratching. Withdrawals and checks from an investment account MUST have a payee. Is that the rule? That doesn't seem to apply in non-investment accounts.

Back to @Catherine Shenoy If you want to track specific spending to "Brokerage House" as a Payee, use the Withdraw approach.

Sherlock

q_lurker said:

Sherlock said:

Note: Specifying a payee on an MiscExp transaction should convert the transaction into a Withdraw.

Head scratching?!?.. Didn't know you could do that, but you can when viewing the register. And the reverse holds true - Have a Withdrawal transaction with a Payee specified. Delete the Payee and it becomes a MiscExp transaction. Deleting the payee from a WriteChk transaction also converts it to a MiscExp transactions, but it keeps the Number field.

OK, the program does that. But why? That's my head scratching. Withdrawals and checks from an investment account MUST have a payee. Is that the rule? That doesn't seem to apply in non-investment accounts.

Back to @Catherine Shenoy If you want to track specific spending to "Brokerage House" as a Payee, use the Withdraw approach.

I think it has to do with being able to associate the expense with either a security or a payee in an investment register.

Note: Set the payee in a MiscInc action transaction and the transaction converts to a Deposit action. Clear the payee on a Deposit action transaction and the transactions convert MiscInc action without a security specified.