Best way to handle (std) IRA stock distributions deposited to ROTH accounts

I've a question related to several posts on this topic...

My question is whether there's a better method for getting Quicken (latest subscription ver.) to categorize IRA distribution amounts into 1099R categories for the reports...

In this particular case I transferred stocks from my std IRA to my ROTH, recording in Q as a sale and then cash deposit into the Roth - as other posts have recommended.

But I don't get the amounts showing up as 1099R distributions when doing that... perhaps something to do with the Roth account type? (which I"ve set to a Roth IRA in Q).

What I seem to need to do is transfer the cash through a non-retirement account as a deposit, in which case the amounts do get reflected on the 1099R lineitems.

Ultimately I just want the right amounts to show in the tax planner, but would rather not pollute unrelated accounts with bogus transactions to accomplish this.

I did try just having a "withdrawel" transaction in the std IRA, with that same account as the destination (like a balance adjustment within that account), but that did not work.

Answers

  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    As far as I know, the only method to get these Roth conversions recorded properly is the one you have used - transferring the cash through a taxable account. I have a hidden cash account that I use for things like this. The account normally has a zero balance so it does not interfere with reports.

    If you would like Quicken to make improvements in this area, please comment and vote on this Idea
    https://community.quicken.com/discussion/7864626/improve-handling-of-ira-distributions-including-qcds-and-roth-conversions/p1
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  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    HI @GRH,

    The transaction that you make for the "distribution out of the standard IRA account" is the transaction that controls whether the distribution will appear as a 1099-R distribution on the "Tax Schedule - Current Year" report.  So it is that transaction that you absolutely need to get correct.

    And while you want to avoid "bogus transactions", I believe that you will need to first enter a "Shares Sold" entry to convert the stocks to cash as of the date the securities were transferred, and then use a "Cash transferred out of account" transaction type to move the cash out of this standard IRA account.  Also, I would suggest that this transaction be entered as two parts - transferring first into a regular bank account (or Cash account) in Quicken and then out of this account - rather than directly into the ROTH account. 

    You'll then need to final "Buy" transaction in the ROTH account converting the cash back to the securities you transferred (using the same date and price information as above).

    I hope this helps.  Let me know if you have any followups.

    Frankx

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  • Rocket J Squirrel
    Rocket J Squirrel SuperUser ✭✭✭✭✭
    This can be simplified using the proverbial "one weird trick" of IRA distributions in Quicken. An intermediate account is not needed.
    When transferring the cash proceeds of the sale in the IRA, enter a DEPOSIT transaction in the Roth, and use the [IRA Account] as the Category. Then the tax reporting will be correct throughout Quicken.
    Using a DEPOSIT transaction is the only way that this always works regardless of the destination account type. "Cash transferred out", for example, does not work directly from trad IRA to Roth.
    Quicken user since version 2 for DOS, now using QWin Premier Subscription on Win10 Pro.
  • GRH
    GRH Member ✭✭
    edited September 9
    > @Rocket J Squirrel said:

    > When transferring the cash proceeds of the sale in the IRA, enter a DEPOSIT transaction in the Roth, and use the [IRA Account] as the Category. Then the tax reporting will be correct throughout Quicken.

    This is exactly how I've entered them, but the tax reporting is still missing (no 1099R entry). However, if I make the deposit to a cash/banking account - the reporting does appear. I've checked the account type on both the Roth and std IRA's and they look correct, as well as the tax schedule information settings on the accounts... not sure what I am missing?
  • Rocket J Squirrel
    Rocket J Squirrel SuperUser ✭✭✭✭✭
    GRH said:
    > @Rocket J Squirrel said:

    > When transferring the cash proceeds of the sale in the IRA, enter a DEPOSIT transaction in the Roth, and use the [IRA Account] as the Category. Then the tax reporting will be correct throughout Quicken.

    This is exactly how I've entered them, but the tax reporting is still missing (no 1099R entry). However, if I make the deposit to a cash/banking account - the reporting does appear. I've checked the account type on both the Roth and std IRA's and they look correct, as well as the tax schedule information settings on the accounts... not sure what I am missing?
    I'm not sure. It works for me every year. The only thing I could think of would be that the Tax Schedule for transfers out of the trad IRA is not set correctly to 1099-R:Total IRA taxable distrib. Your screen shot shows the Roth account details, but the the trad IRA is where this setting is critical. Here is my version of the Tax Schedule report to compare with yours.

    Quicken user since version 2 for DOS, now using QWin Premier Subscription on Win10 Pro.
  • Rocket J Squirrel
    Rocket J Squirrel SuperUser ✭✭✭✭✭
    edited September 9
    Wait, hold the phone. I did a Roth conversion in 2021 which I am pretty certain did appear in my tax reports for that year using the then-current version of Quicken. But it is not showing in reports now in R43.20. It does continue to appear correctly in Tax Planner for 2021.
    So my normal distributions directly into my brokerage account continue to show correctly in reports, but the Roth conversion no longer appears. I have no explanation other than "it's a bug."
    Quicken user since version 2 for DOS, now using QWin Premier Subscription on Win10 Pro.
  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    Hi again @GRH,

    Above, you say
     GRH said:
    This is exactly how I've entered them, but the tax reporting is still missing (no 1099R entry). However, if I make the deposit to a cash/banking account - the reporting does appear. 

    That's why I noted above - "Also, I would suggest that this transaction be entered as two parts - transferring first into a regular bank account (or Cash account) in Quicken and then out of this account - rather than directly into the ROTH account."

    Frankx 


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  • GRH
    GRH Member ✭✭
    So it seems a new "bug" or "feature" introduced with a more recent update broke a previous workaround
    that many had used successfully and the alternate "launder through a cash account via bogus transactions" approach is now the BKM B) . I'll check into reporting the bug so perhaps future updates can correct.