How do I record a conversion of a Traditional IRA to Roth IRA in Quicken?

TonyP

In July 2025, I converted my entire Traditional IRA into a Roth IRA. I paid the estimated taxes. How do record this conversion in Quicken.

Jim_Harman

Quicken says they are working on an improved way of entering Roth conversions and other distributions from tax deferred accounts. It has been in the "Planned" state since August 2023.

Until that is available, here is the method I have used to enter Roth conversions.

To have the tax implications of a Roth conversion recorded correctly in Quicken, you must record it as moving through a taxable account. What I do is:

1. In the Account Details for the IRA, make sure the Tax Schedule for Transfers Out is set to 1099-R:Total IRA Taxable Distrib. In the Roth account, make sure the Tax Schedule for Transfers In is blank.
2. Sell the shares for the conversion in the IRA.
3. In a taxable account, record a Deposit with the Category set to the IRA account name in [square brackets] of the full amount of the conversion. If taxes were withheld, split the transaction and record them as negative amounts.
   If the deposit is made to a banking account between Jan. 1 and April 15, you will see a dialog titled “Confirm Your Contribution Tax Year”, even though this is a distribution and not a contribution. Select the current year, not the default of the previous year, and click on OK. This seems to be a bug.
4. In the same taxable account on the same day, separately record a transfer of the net amount to the Roth account. I record these as two transactions because Quicken sometimes gets confused with zero-amount transactions.
5. Also on the same day, Buy the converted shares in the Roth account
6. Delete or do not accept any downloaded transactions associated with the conversion.

I have focused on getting the Tax reports and Tax Planner correct. My conversions have all involved moving cash, but if the shares were moved in kind, I think you might as well record it as a Sold in the IRA and Bought on the same day for the same price in the Roth account. This resets the cost basis, but cost basis is not important in a tax deferred account.

When measuring performance of a period that includes the transfer with the Investment Performance Report or the Avg. Annual Return (%) columns in the Portfolio views, you should include both accounts.

BK

@Jim_Harman , Question on point #1 where you wrote

In the Roth account, make sure the Tax Schedule for Transfers In is blank.

So if there are also annual contributions made to the Roth IRA, I would want the Transfer In = Form 1040: IRA Contribution to be selected, correct? So what is the workaround for this conflict? Thanks.

Jim_Harman

A contribution to a Roth IRA is not a taxable event thus the Tax Line Item should be blank.

Disclaimer: I am not a tax advisor. Consult your tax advisor.

BK

Duh! Thank you as always @Jim_Harman . Clearly I was not thinking and didn't take that into consideration.

Jim_Harman

An additional note:

If you need to assign a different tax line item to a transaction in a banking account other than the default for the Category or transfer account, you can click on the transaction's More actions gear or right click on the transaction, and select Tax line item assignments. For split transactions, open the split window and click on Edit for each line you want to change and again select Tax line item assignments.

BK

Got it - clear. Thank you @Jim_Harman