Quicken does Not Handle Treasury Bill Interest Correctly
This is a problem that has been in Quicken since Day 1. Quicken treats Treasury Bill purchases and sales are treated as capital gains rather than interest income. This is wrong from both a tax and investing perspective. I've attached a sample image of how a typical T-Bill looks in my account. If the "Bond Type" is "Treasury Bill" then any gain should be categorized as "Interest Inc" or "_IntInc" and not included in a Capital Gains report.
A related complaint: When quicken downloads the purchase transaction it put the T-Bill in the "Domestic Bonds" asset class and "Corporate Bond" bond type. Every time I purchase a T-Bill I need to manually fix that (as below) and need to manually enter the Maturity Date even though that information is in the incoming data.
The work around I have for segregating Treasury Bill interest is to create a Capital Gains report that only includes "Bonds" but that isn't completely correct as all bond transactions are included. I could make the Type "T-Bill" but that does not allow me to enter a maturity date which would mess up the "Maturity Dates for Bonds and CDs" report which I use extensively.
Maybe I'm missing something. If so, I'd love to be educated.
Comments
-
I am going to point you to this discussion as a starter -
One reason for that discussion is to note that different brokerages download these transactions differently. "even though that information is in the incoming data." is likely a misunderstanding of downloaded data.
Other discussions can be located via a Google search on 'Treasury bills site:community.quicken.com'
0 -
You typically purchase TBills at a discount, then receive all your interest and your original capital at maturity. The trick here is to record the maturity in two parts:
- Record a "sale" using the original capital amount as the price. Result: no capital gain
- Record the rest of the cash received as interest income. Result: Interest income is properly stated and total cash received at maturity is correct.
With Investment Accounts you simply can't simply accepting "downloads" to get your accounting correct, assuming that's the source of your problem.
1 -
I'm aware of this workaround but it's exactly that: a workaround. Quicken itself can fix this problem by looking at the Bond Type field when processing reports.
Quicken is supposed to reduce the effort needed to track your finances. Why use it if you still have to jump through manual hoops to fix something it should get right in the first place?
0 -
FWIW, Vanguard sends T-bill redemptions to Quicken as 2 transactions, a Sell & Interest. So, Quicken will handle T-bill redemptions correctly if the broker packages the download file correctly.
0 -
Ah, I didn't know that you did know the correct accounting here.
If you had posted this as an "Idea", one that laid out the current behavior and what you'd like to see Quicken do, programmatically, when a T-Bill matures, then I wouldn't have made that egregious mistake. It came across as a rant of some sort and, as you can see by @markus1957's post, Quicken is to a large extent limited by how the broker reports these transactions.
Maybe speak to your broker? You'd have a powerful argument to make here since if the problem is on their side then they are the ones inconveniencing their customers and increasing the effort needed by their customers to track their finances.
0
