Mutual Fund Conversion

System

This discussion was created from comments split from: Issue with a mutual fund.

budi

This is a new but hopefully less complicated issue. I am still looking for resolution for the last probelm so please don't eliminate it

I converted a SEP mutual fund in kind and in total to a roth fund. I used the option for the transaction "Mutual Fund Conversion" I enterd the information and put the new name as the —- Mutual Fund Roth vs the —— mutual fund Sep. The system defaulted to the Sep and won't let me change it for a zero net change.

Would it work better to add the Mutual FUnd as a new fund as a Roth account and then transfer all shares?

Tom Young

I'll assume that SEP is referring to "Simplified Employee Pension." A SEP is an ACCOUNT that typically can hold various SECURITIES.

I'll assume that the term "SEP mutual fund" means "a mutual fund (security) that is help in a SEP."

It's unclear to me exactly what "converted… in kind…to a roth fund" means, exactly. It suggests to me that a security (or maybe all the securities) inside a Traditional SEP was distributed out of the Traditional SEP and into a separate ROTH account, though that seems to contradict your use of the "Mutual Fund Conversion" action; the security (or securities) that were in the Traditional SEP would have the exact same name in the Roth SEP.

It sounds to me like you tried to do the conversion inside one Quicken IRA Account and I don't think you can change the "nature" of the Account in that fashion. So, yes, it would be better to create a new, empty, Roth IRA and simply transfer the security or securities.

Jim_Harman

@budi

This is another case where we must distinguish between Securities such as mutual funds and the Accounts that hold these funds.

In your case you held Security XXX in a SEP account which happened to have the same name. In real life you did a Roth Conversion and moved that security from the SEP account to a new Roth account. Do you care about whether the tax implications of the Roth conversion are recorded correctly in Quicken? If not, you have two choices on how to record this in Quicken.

1. You could create a new Roth account in Quicken and then in the SEP account click on Enter Transactions and select "Shares transferred between accounts" to move the shares to the new account. To avoid confusion in the future, please give the new account a different name than the security. You could call it "Broker YYY Roth" or whatever.
2. You could go to the Account Details for the SEP account, click on the selection box next to Account type, and change it to a Roth account.

If you use Quicken's Tax reports and care about recording the tax implications of this conversion correctly, please post back for further instructions.