Add Invest Amt column to report column selection list to track Roth conversions by security

Bosco

Roth conversion amounts need to be tracked for tax and Medicare MAGI purposes. The actual value of a security that has been converted from an IRA to a Roth account is needed for calculating income to be taxed. A person doesn't want to have more income in a year that will move them to the next tax bracket or push them over the Medicare MAGI limit so they will have to pay a higher Medicare premium the following year. If you have higher income, you’ll pay an additional premium amount for Medicare Part B and Medicare prescription drug coverage. The Social Security Administration calls the additional amount the “income-related monthly adjustment amount or IRMAA".

The converted security is downloaded from the IRA broker account as Remove Shares. One can tag these transactions with "Roth Conversion" and create a report for the Remove Shares category tagged as Roth Conversion but the value of the security transferred to the Roth account is not on the report. The Invest AMT is needed on the report.

The Invest AMT on a report can be used to track IRA to Roth conversion withdrawals that are considered income for tax purposes and the Medicare premium.

Please add the Invest AMT column to the report column selection list.

The Invest Amt is available on the portfolio account view but I don't want to export into a spread sheet to arrive at a total.

Thank you,
Bruce

jacobs

I'm not understanding this request. When you do a Roth conversion, 100% of the conversion amount is taxable income. Why would we need a separate column for this?

Bosco

When you convert individual securities from IRA to Roth the only way to know the taxable amount is to look at the Remove Share transaction Invest Amt column. When I convert multiple securities during the year I want to be able to run a report showing the total value of all conversions. To do that the Invest Amt field needs to be available on a report. Right now there isn’t a conversion dollar value available on the report and the Remove Share transaction shows up as zero value. See the report screen shot. You can’t add Invest Amt column. It is only on the account view screen. I am asking for it to be available in the reports.

jacobs

Why are you using Remove Shares? When you convert money from a traditional IRA to a Roth IRA, you should be using a Sell transaction in the traditional IRA, creating cash in that account. Then a Transfer transaction to move the cash to the Roth IRA account. And then a Buy transaction in the Roth IRA account.

Then you could create a simple transaction report showing transfers from the IRA to the Roth IRA account. All of that money is taxable income.

Bosco

I never sell the security in the IRA. I use a Fidelity feature to move the securities "In Kind" from the IRA to the Roth. I do not sell the security, transfer the cash and then buy the security in the Roth. Too much risk in radical price changes from when the sell happens to when the buy happens in the Roth. From the Fidelity IRA to the Fidelity Roth the entire move happens after market close on the same day that I initiate the conversion. I call Fidelity to accomplish this so I can set the federal and state tax percentages used to journal the taxes, which then shows up on a 1099. Then I never have to pay a federal or state quarterly tax bill. I am retired and have no employer wages so I must make sure all of my investment income and conversions are taxed correctly so I don't have deal with it on a quarterly basis.

The Remove Shares transaction is downloaded from Fidelity in the IRA. Then I edit that transaction and use the Transfer feature to move all of the transaction history for that security to the Roth. Quicken will move the history and then it creates and offsetting transaction in the Roth so the number of shares is not doubled.

jacobs

I do not sell the security, transfer the cash and then buy the security in the Roth.

I actually believe that is exactly what you're doing. Fidelity handles it for you as one seamless transaction, but a sale, transfer and purchase is what's happening. And because of that, moving the transaction history to the Roth account is technically incorrect — you have actually sold and purchased the security anew — but as a practical matter this history and basis doesn't matter for tax purposes since the money in the Roth is forever tax free.

I have my IRA accounts at Vanguard rather than Fidelity. When I do a Roth conversion on their website, I specify the dollar amount and the source security(ies) in my traditional IRA, and the destination Roth account and security(ies). (It could be the same security or a different one; it doesn't matter in terms of the transactions, nor for tax purposes.) Of course, you can specify tax withholding if you want as part of the transaction.

So all I'm pointing out to you is that if you do the sell, transfer and purchase transactions instead of the way you're currently doing it, you will then have an easy way to generate a report of how much you converted into your Roth account.

Another way to see how much you moved out of your traditional IRA account is in the Portfolio view, setting the filters to Realized Gain. You're not interested in the realized gain, but this view also has a column for Proceeds. So if you do your conversion transactions as a Sell, all the proceeds are taxable income. (Even if you're taking RMDs from your IRA, those are taxable, along with the Roth conversions, so the Proceeds column and total shows your taxable income.)

Bosco

Please review the definition of transferring securities between accounts "In Kind". The securities are not sold and repurchased, they are just moved to a different account. And transferring the history from the IRA to the Roth is the only way to maintain a record of buys and sells so the average price paid per share and ROI is accurate.

https://smartasset.com/financial-advisor/in-kind-transfer

You might want to look at "In Kind" transfers, it is much easier, contains less steps and you don't have to deal with the stock price fluctuations. 😉 Sell, transfer cash, buy, might make it easy in Quicken but not necessarily the right way to do it to maintain the correct ROI and average price paid. If you are reinvesting dividends and have had security splits you will loose all that history by selling in IRA and buying the security in the Roth. To each their own but I will not follow that method when "In Kind" transfers are available to use.

Quicken needs to make it easy to see the value of the "In Kind" transfer of assets from an IRA to Roth so the user knows the exact value for tax purposes. The value is in the "Invest Amt" column already and adding it to the report column selection is the solution for a user to track "In Kind" security transfers.

jacobs

Thanks. I'm aware of what an "in kind" transfer is. Note that in the article you linked, it says, "Keep in mind that your new account type needs to be the same as your old account for an in kind transfer." The in-kind conversion Fidelity is doing for you makes it easy to avoid the security price going up or down on the date of your transaction, but it functions as the equivalent of selling, transferring, and buying a security on the same day — and the sale proceeds is what's taxable income.

I'm not sure why you're concerned with maintaining your security history. In a non-retirement account, of course, you need to maintain this information so you can properly calculate the capital gain when you sell shares of the security. But in an IRA — unless you have made non-deductible contributions in the past — cost basis and gains are irrelevant because every dollar you withdraw is taxable as ordinary income. It doesn't matter what came from your deductible contributions, from interest, from dividends reinvested, etc. I thought your concern was for tax tracking purposes, but it sounds like your reason for doing this is for your own interest in tracking your investment performance over time, pre- and post-Roth conversion.

I'm not arguing against adding another column option anywhere; I was just trying to show you how you could get the tracking of your Roth conversions amounts in Quicken currently.

That said, you repeatedly say you want Invest Amt added to report column selection, but there are no investment reports at this time. The existing transaction/summary reports are built mostly for banking transactions; you can't get many investment activities — like gains/losses — in those reports, except the Tax reports. I think we all hope to see Quicken add true investment reports in the future, and presumably that would include Invest Amt as an available column to include.

Bosco

To put this thread back on track I am reiterating the use case for my request.

I use the "In Kind" brokerage transfer to move shares from an IRA to a Roth account and need to track the value of the security positions moved in order to estimate my taxable income for the year. That estimate is valuable to ensure I don't exceed the medicare income limit of $194,000 that would result in the monthly medicare premium being increased the next year. I also use the estimate to ensure I don't move too many securities from an IRA to a Roth resulting in stepping into the next federal income tax bracket.

When an "In Kind" transaction is executed at Fidelity the shares are removed from one account and added to another account without selling and buying at either end of the move. I verified this with a Fidelity advisor and reviewed the transactions in my Fidelity account after a transfer. The fact is that when the transactions are downloaded from Fidelity they are "Remove Shares" and "Add Shares" transaction types, not sells and buys in the respective accounts. Quicken puts the value of the "Remove Shares" in the "Invest Amt" column which can be displayed in the portfolio transaction view. The "Remove Shares" and "Add Shares" transaction have no value in the "Amount" field, so that field is useless in transaction reports.

I use a simple time based Transaction report to get information from the retirement accounts and found that the "Invest Amt" is not a column available to a Transaction report. I am not asking for an Investment type of report, just asking for the "Invest Amt" to be added to the list of columns available on a Transaction report.

@jacobs has given his advise with regard to transferring securities from an IRA to a Roth by executing buys and sells to accomplish it. Thank you, but I am not interested in complicating the share transfer process.

I would appreciate a comment from a Quicken moderator indicating if the "Invest Amt" displayed in a transaction view is within reach to be added to a transaction report.

jacobs

@Bosco Just so you’re not further frustrated by any lack of response: Quicken moderators here have no say over, nor insight into, what features will be implemented in the future.

You’ve made a good case for your enhancement request. It now requires fellow Quicken users to add their votes for it in order for this to get sent to the developers for consideration. (Or perhaps, if they are already planning or working on investment reports — which many users have asked for over many years — this field will be part of their specification for the reports.)