How to record Profits Interest Units award in Quicken - for LLC

jhansen

I am struggling to find an answer on how best to record Profits Interest Units award in my Quicken Classic Premier. These are similar in structure to RSU's, but enough different that I don't want to use RSU's because they are taxed at capital gains instead of income. Any thoughts welcome.

NotACPA

Off the top of my head, the only thing that I'm seeing is a "Shares Added" action.

BUT, is this award itself taxable?

jhansen

https://community.quicken.com/discussion/comment/20492949#Comment_20492949

The award can be elected to be taxed as income in the year received, but the preferred strategy is most likely to claim it at the time of sale some years later as capital gains. Presently, I just entered the Profits Units as a separate security and put the price as the difference between current unit price & Profits Units prices. This will accurately describe the capital gains, but takes a bit more energy.

NotACPA

I'm fascinated by the concept of this security (and I agree, a separate security seems necessary).

How would those Cap Gains be calculated, if there's no cost for the security itself? From what you've written, it looks like the Profit Units have $0 cost, but the difference between the value upon receipt and the value when sold result in a Cap Gain or loss.

But a security having no cost is something that I've never heard of, or imagined.

jhansen

https://community.quicken.com/discussion/comment/20493187#Comment_20493187

Hello NotACPA. As notacpa as well, it seems clear that capital gains are calculated based on sale minus award price, in other words you on get the value of the gain. The gain is thusly taxed like any other sale based on hold ing period and AGI, this is my impression. The real question is when do you pay tax on the gain, I feel like this can be amortized, but that I'll have to ask my tax guy…