Tax Line attributes for RMDs

Question

I am now required to take a distribution from my IRA. In the account detail, the account is designated as tax deferred. In account detail, I have set the flag for transactions out to record the distribution as a taxable distribution.

The issue is that the account generates investment income from the portfolio which continue to show on the Tax Schedule Report as Income. So far the only way I have found to correct this is to edit each transaction in the investment account by deleting the taxable income flag.

Is there a way to set a global flag for income transactions as non taxable while preserving the assignment of MRD transfers as a taxable distribution?

Steven Beckett · Answer

Thanks for your comment, but I have figured it out.

The IRA account is flagged as Tax deferred in Account details. At the bottom of that screen there is a button for Tax Schedule. In the screen that pops up one can designate Transfers out as a gross distribution. Consequently, when the Tax Schedule report is run only the Transfers Out are classified as taxable Income. Any investment income in the IRA is not reported.

Chris_QPW · Answer

Can someone enlighten me about where the "taxable income flag" would be?

I have never heard/seen such a thing in an investment account.  There is a possibility of categories that are connected to tax lines.  Is this what is meant?

"(and there's no place to use a category anyway)."

Withdraw allows for a category or even splitting the transaction.

On the other hand, these shouldn't be used for tax purposes because the way the tax reports are setup, they should automatically not include the tax deferred accounts.  If you have overridden that selection and selected these accounts, that is the problem.  If these accounts are being included by default, then that would be a bug in Quicken, but like @q_lurker said, I haven't seen that happening.  But to summarize, Quicken doesn't really do anything special in the accounts for taxable/not taxable, its approach is to just not include the account in the given report.

Recording of tax needs to be done either with the tax line associated with transferring out of the account (in the Account Details) or by recording them in a taxable account after the gross amount has been transferred to it.

Note that the Tax Planner also doesn't include the tax deferred accounts in "income" and can't be overridden.

q_lurker · Answer

I am not aware of any such documented bug.  My Tax Schedule reports do not include any transactions from my various retirement accounts.  (Current R60.20 release.)  The Distribution I took from an IRA does show as Total IRA gross distributions consistent with my tax schedule setting for withdrawals from that account.

Accounts set up as tax-deferred are omitted by default from the basic Tax Schedule Report (and all other tax reports).  That should not be overriden by the user.  Have you confirmed that the IRA account is not checked to be included in the report?