Where does RMD cash transferred out of a Simple Tracking IRA brokerage account go?

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klcross
klcross Member ✭✭

I have had the broker transfer my IRA RMD to my checking account. I have the brokerage account in Quicken set-up with Simple Tracking. Where did the cash go? And if it is in the "ether" what are the steps needed to account for it in the proper Income Category and in the checking account, which btw is using Complete Tracking? Thanks.

Best Answer

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    Answer ✓
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    The distribution - net of any taxes withheld - should show up in your checking Account. If you are relying only on downloads to make entries to your Accounts then, most likely but not necessarily, you'd probably see the distribution from the IRA custodian posted first, followed by the entry to the checking Account in a day or two.

    There is no "income" Category associated with the distribution out of the IRA as, from a pure accounting standpoint, it's not income it's a transfer of money from one Account to another Account in your file. Like moving money out of a savings Account to your checking Account. Of course for statutory purposes (income taxes) it is income and needs to be included in your income tax return. If you've set up the Account properly with respect to "transfers out" of that Account, Quicken will pick up the transfer as taxable income in its Tax Reports.

    If the amount that shows up in your checking account is a "net of taxes" number then you will need to split that deposit. The first line item of the split is recorded as a Transfer from IRA to checking in the gross amount of the distribution. That's where Quicken will identify the proper amount of taxable income in its Tax Reports. Then you enter the tax or taxes as negative numbers, coded to the appropriate Category(s). The negative amounts will bring you back to the net deposit.

Answers

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    Answer ✓
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    The distribution - net of any taxes withheld - should show up in your checking Account. If you are relying only on downloads to make entries to your Accounts then, most likely but not necessarily, you'd probably see the distribution from the IRA custodian posted first, followed by the entry to the checking Account in a day or two.

    There is no "income" Category associated with the distribution out of the IRA as, from a pure accounting standpoint, it's not income it's a transfer of money from one Account to another Account in your file. Like moving money out of a savings Account to your checking Account. Of course for statutory purposes (income taxes) it is income and needs to be included in your income tax return. If you've set up the Account properly with respect to "transfers out" of that Account, Quicken will pick up the transfer as taxable income in its Tax Reports.

    If the amount that shows up in your checking account is a "net of taxes" number then you will need to split that deposit. The first line item of the split is recorded as a Transfer from IRA to checking in the gross amount of the distribution. That's where Quicken will identify the proper amount of taxable income in its Tax Reports. Then you enter the tax or taxes as negative numbers, coded to the appropriate Category(s). The negative amounts will bring you back to the net deposit.

  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
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    The SIMPLE tracking is the catch here. I think what you need to do is enter the transaction manually in your checking account, or edit the downloaded transaction in you checking account to properly reflect both the Gross RMD withdrawal and any state and federal tax withholdings — all as Tom suggested above.

    Normally (COMPLETE tracking in the Investment IRA account in Quicken), the gross RMD withdrawal portion in the checking account transaction would be as a transfer from the IRA account, i.e. [IRA Account] or however you have that account named in Quicken. I don't know what happens if you use that designation and the referenced account is in SIMPLE tracking. Perhaps it still records fine. But even then the companion question is whether that withdrawal transfer out gets identified as a 1099R income. Again, for an account set for SIMPLE tracking, I don't know how that flows.

    You'll need to try it out and see what happens. Post back and let us know.

  • retird
    retird Member ✭✭✭✭
    edited October 2023
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    When did the broker transfer the RMD? When my broker transfers a transaction to the account I designated the bank receives it as a "pending transaction". After the bank posts the transaction (a day or two excluding weekends and holidays) I do an OSU and the transaction is there.

    Also, when the broker transfers I can go into my account on the Bank's web site and check if it is showing as a "pending transaction". It shows up shortly after transfered. Then the bank processes it from pending to posted usually the next day excluding weekends or holidays.

    Windows 11 (2 separate computers)..... Quicken Premier.. HAVE USED QUICKEN CONTINUOUSLY SINCE 1985.

  • klcross
    klcross Member ✭✭
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    Thank you all. I believe that you have solved my problem

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