New basis of investment when transferred from IRA for RMD to taxable brokerage account

Grandma B

I download transactions from TD Ameritrade into Quicken with normally no issues. However when some shares of investments were transferred for my RMD from the IRA to one my taxable accounts (same investments) quicken shows the actual cost in the taxable account as the same as from IRA. The value of investment when transferred is supposed to be the new cost/basis however for the taxable account... Do I just edit it or ... what is the best way to have numbers correct? Thanks

Sherlock

I suggest the in-kind transfer of shares be entered as Sold in the IRA and BoughtX in the brokerage account using the expected RMD value which you may need to correct when you receive the 1099-R.

The IRA account should have the Transfers Out: set to 1099-R:Total IRA taxable distrib.  To confirm, open the IRA, press Ctrl + Shift + E, and select Tax Schedule.

Jim_Harman

I think the correct transactions to record in Quicken would be
-- Sell the securities in the IRA
-- Go to the taxable account and enter a Cash transferred into account (XIn) to move the cash to the taxable account
-- Buy the same securities in the taxable account.

This should record the distribution correctly for the Tax Planner and reports. Consult your tax advisor to be sure of the correct cost basis and tax treatment for this situation.

See this FAQ for a discussion of RMDs.
https://community.quicken.com/discussion/7072150/faq-best-way-to-handle-distributions-from-ira-also-rmd

Grandma B

When entering the sale in the IRA - what do I enter as the price? The value at transfer since that'd be the new cost in the taxable account. OR - the original cost from the IRA since really just a transfer?? -- I did make sure the tax schedule as commented from Sherlock is set as he suggested. --The download from TD Ameritrade into quicken is as just shares out - not even shares transferred.

Tom Young

@Grandma B

You need to enter the sale using the current market price per share at the time of the in-kind distribution.  That way you have the correct amount of cash in the IRA to transfer to your after-tax Account, and then use the cash to buy the security again at the same price.

The Transfer action in Quicken simply moves the security, cost basis intact, into a different Account, and that's not what you want here.

Sherlock

Grandma B said:

When entering the sale in the IRA - what do I enter as the price? The value at transfer since that'd be the new cost in the taxable account. OR - the original cost from the IRA since really just a transfer?? -- I did make sure the tax schedule as commented from Sherlock is set as he suggested. --The download from TD Ameritrade into quicken is as just shares out - not even shares transferred.

If you enter the RMD value with the number of shares as suggest earlier, Quicken should calculate the appropriate share price.  I suggest you delete the inappropriate transactions you imported.