Memorized Investment Transaction not supported in open account - IRA distribution

DoctorBrown

I am attempting to automate a Regular Monthly Distribution from my IRA to my checking account. After much searching and testing, I have found the Memorized Investment Transaction List. What I have found is that I can successfully use a Sold Transaction of MMF shares. I can also successfully use a WithdrawX and Record Proceeds To: my checking account.

But when I try to use a SoldX: Sell shares in MMF and Record Proceeds to: my checking account,

I get the error:

Why doesn't that work? Am I missing something?

Boatnmaniac

I don't use Memorized Investment Transactions but if you are having income tax withheld from the distribution there is are two issues you should be aware of when setting up distribution transfers in IRA accounts and transferring them from there to checking/savings accounts.

1. If you are setting up reminders for the tax to be paid by the IRA account, the Tax Reports and Tax Planner will not capture them. (Expenses in tax exempt and tax deferred accounts are considered to be non-taxable events.)
2. This, then causes the Tax Reports and Tax Planner to under-report the total taxable distribution because the tax withheld and paid by the investment company is part of the taxable income but it is not being captured as such.

There is a planned improvement regarding IRA distributions. But until that is implemented you might want to review the process that I many others view as the best practice for recording IRA distributions:

IN THE RECEIVING ACCOUNT:

1)  Enter a deposit transaction for the net amount of the RMD...a positive number.

2)  Split the category:

• Line 1 of the split:  Category =  transfer from the IRA account for the gross amount...a positive number.
• Line 2 of the split:  Category = the Fed taxes category that you use...a negative number.
• Line 3 of the split:  Category = the State taxes category that you use...a negative number.
• Total of the split:  Must equal the net amount of the deposit.

IN THE IRA ACCOUNT:  Have any securities Sell transactions deposit the proceeds to the IRA account Cash Balance…do not transfer it to another account nor expense it. Then delete the brokerage transactions for

• The net distribution
• The Fed taxes withheld
• The State taxes withheld

I then set up a recurring Income (not Transfer) Reminder for my monthly IRA distributions to be automatically entered into my checking account.  All I need to remember is to 1X per month delete the brokerage downloaded transactions for the net distribution and withheld taxes. 

Also, one other thing you might want to confirm is the Tax Schedule for the IRA account (regardless of which path you take). Quicken often defaults to the wrong one. To do this go to Account Register > upper right Gear icon > Edit Account Details > Tax Schedule button:

Now, if you want to also set up Memorized Investment Transactions for the security sells you can certainly do that. But instead of setting them up to transfer the proceeds to your checking account, set them up to deposit the proceeds to the IRA account's Cash Balance. Then you might be able to avoid having to manually delete Sell transactions as mentioned above.

DoctorBrown

Thank you for the quick response. And the detailed process for handling IRA distributions.

Up until late last year I was using exactly the process you described. But then I got creative and found I could accomplish (what looked like) the same result by entering a SoldX of the MMF transferring funds to the checking account, eliminating the WithdrawalX transactions. The end result of a Sold/WithdrawalX is the same as SoldX as seen by the checking and Investment accounts.

Now I've discovered the pitfalls of that. I then started looking at the Memorized Investment Transactions, hoping I could create an equivalent Memorized transaction to replace the Bill and Income reminder for the WithdrawalX. That's when I discovered the discrepancy between the way Q handles the Sold, SoldX and WithdrawalX transactions in the Memorized Investment Transactions List function. I can Use the Sold, and WithdrawalX transactions, why can't I Use the SoldX transaction?

That is the answer I'm seeking in this thread.