How to handle a Brokerage account that is also used as a Checking account?

hbwilliams22

Right now, I have a Brokerage account that is also used as a Checking account. I receive Dividend payments to this account which are showing up in the Checking transactions as "Personal Income". Is there a correct way to handle Brokerage accounts that might also be used as spending accounts? Attached is a screenshot of the account that lives under both Checking and Investing.

hbwilliams22

Quicken for Mac. I have a cash account within my brokerage account that I frequently spend out of. It is the same account that my dividends are deposited into quarterly. If I do not link this account as a checking account, how will expenses and deposits to/from this account show in the transaction history? Perhaps they won't show at all?

Perhaps marking the Brokerage account setting "Investment Tracking Method" as "Detailed (positions and transactions" would work?

Jon

Cash transactions will show up in the register of your brokerage account just like they do for any other account. Quicken Mac doesn't consider the cash held in your brokerage account to be in a separate account from the investments.

jacobs

Yes, you will need the Detailed investment tracking method. The Simple alternative is for people who download their investment information and just want to know their holdings and value without seeing all the individual transactions. 

jacobs

In Quicken Mac, investment accounts include both investment transactions and banking transactions. When you receive a dividend, it should be entered as Type=Dividend if you receive cash, or Type=Reinvest Dividend if your dividends are automatically reinvested in more shares of the security. All banking transactions use Type=Payment/Deposit, and are then just like transactions in a regular checking or credit card account. 

If you're downloading your transactions and the dividends are coming in as a banking transaction categorized as Personal Income, that's incorrect. It will keep your balance correct, but the dividend income will not be labeled as such on category reports, and won't show up on the tax report. Why is it coming in wrong? I can't answer that, but seems likely it's the fault of your financial institution. What brokerage company is it? It may be worth calling Quicken Support to have them screen share with you and document the problem. 

hbwilliams22

@jacobs, the issue might have been that I added the same account as a both a brokerage account and a checking account. For whatever reason, it was prioritizing checking categories over brokerage categories.

What I did instead was remove the account from checking and left it as a brokerage account. Additionally, I changed the brokerage account setting to include “all transactions” and not just the “simple” view. This way, my expenses (and deposits like dividends) from my brokerage account show up in my transactions view. I also have both checking and brokerage categories when cataloging these transactions. As mentioned in the primary post, I do make some transactions in my brokerage account that are not investment transactions but to my knowledge, QMac doesn’t support this type of functionality like QWin does?

Hoping this is the right approach.

jacobs

hbwilliams22 said:

As mentioned in the primary post, I do make some transactions in my brokerage account that are not investment transactions but to my knowledge, QMac doesn’t support this type of functionality like QWin does?

Yes, it does. The Type field allows all your investing actions: buy, sell, dividend, capital gains, etc. But when Type is set to Payment/Deposit, the transaction becomes a banking transaction, so you can record checks, categorize expenses, create splits, make transfers, etc. 

hbwilliams22

In order to do those actions within a Brokerage account, the account tracking method must be set to Detailed, correct?

jacobs

Yes. You only see the transactions if it is set to Detailed.

Catherine

Brokerage is brokerage, checking is checking and never the twain shall meet, according to Quicken. I have a checking account for my IRA. The checking account is Business Checking at my bank. That is possible when the Self Directed IRA owns an LLC, and that LLC opens a bank account. Here's the catch. Checking accounts cannot post to securities, nor can the income be classified as investment income. But I can't download a checking account in the Investments Section. It just doesn't go. I can see where a brokerage checking account might result in the same Catch-22. For now, it's manual entries, these posts were very helpful.

NotACPA

Maybe "never the twain shall meet", but if you want, in QMac, to use your brokerages checking account feature, you need to do so in your brokerage account in QMac.

So, they met!

hbwilliams22

Marking my Brokerage account as "Detailed" and not "Simple" has allowed me to categorize expenses out of my Brokerage account. But maybe I am doing this wrong?