How To Record These Investment Transactions?

Austin@

What is the best way to record the following two transactions in my Fidelity NetBenefits 401(k) account? I'm new to investing and what all the terms and options in Quicken mean.



For the "Advisor / Consultant Fee" Fidelity downloaded a "Sell" transaction, but I don't think that's right because that resulted in a cash balance showing in Quicken and I don't have a cash balance...I'm thinking it should be set to "Remove Shares"?

Nothing downloaded for the "Realized Gain/Loss" transaction, so I'm not sure if I need to add anything (I'm honestly not sure what Realized Gain/Loss even means, so any insight there is appreciated as well).

Here are the details of my setup:
Quicken Version: Quicken Premier for Mac, Version 6.6.2
OS Version: macOS 12.3.1
Financial Institution: Fidelity NetBenefits
Account Type: Roth 401(k)
Connection Method: Direct Connect

Jon

It looks to me like they sold 0.349 shares of "AC RD 2055 TR I" (some sort of target date fund?) to generate cash to pay their advisor fee. You could use "Remove Shares" to remove the 0.349 shares without generating any cash, or you could add a second transaction showing the money being spent on the advisor fee, which would reduce the cash balance to zero.

The "Realized Gain/Loss" is probably due to them selling those shares for slightly less than what you initially paid. I don't know why you'd need a transaction for that, though.

jacobs

When you do a Sell transaction, the sale will create cash, and the difference between the purchase price and the sale price is the gain or loss. There is no transaction recorded for the gain/loss, but Quicken calculates it internally when you run a report. Gains are taxable income; if the sale is of shares you held for less than a year, it's called a short-term gain and is taxable like your regular income; if the shares have been held for more than a year, it's a long-term capital gain which is taxable at a lower rate. (Losses subtract from your gains, reducing the taxable amount.)

That all said, this transaction is in a retirement account. Gains in retirement accounts, whether from dividends or capital gains, are not taxable. You get taxed when you eventually withdraw money from the 401k or IRA in retirement. Quicken knows this, and doesn't calculate capital gains/losses on sales of shares in retirement accounts. And that's why Jon said it doesn't really matter how you record the removal of shares.

Personally, I would record the sale, generating cash, and then record a Payment/Deposit transaction to remove the cash and categorize it as an investment fee. This gives you a more accurate picture of what actually happened, and because you've categorize the expense, you can see how much you've incurred in charges at the end of the year. 

Austin@

@Jon and @jacobs thank you both for your help. I've gotten everything squared away now.