How to properly track an investment loan from a personal investment account?

I have taken a 5 year loan out against my 401a account that is currently tracked and reconciled in Quicken and want to properly amortize the loan payments back into the 401a account from my checking account.

I have tried creating an Asset and account and converted it to a loan showing a negative balance with principle of my payment transferred from checking, properly reducing the loan balance. However this principle amount is not properly reflected or linked in my 401a account as an increase of value. I have also tried creating a simple Loan account with the same issue.

I am not an accountant, however this loan is like a sub account to the 401a investment account, initially reducing the value of the investment account with principle and interest reinvested on a monthly basis. Is there a way to directly link the accounts and properly amortize the payments into the 401a investment account?

I called Quicken Support and couldn't resolve the issue.

Answers

  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    If you could provide a little more information on what you have already done in Quicken, it would help to determine next steps.

    It sounds like you have setup a loan payable in Quicken, presumably when you received the check from the Plan for the total amount of the loan. It also seems like the loan is being amortized as you make payments. Is that correct?

    Not sure what you've actually done when you say "I have tried creating an Asset and account and converted it to a loan showing a negative balance with principle of my payment transferred from checking, properly reducing the loan balance. However this principle amount is not properly reflected or linked in my 401a account as an increase of value. I have also tried creating a simple Loan account with the same issue." --- Does the "Asset" you set up appear as an "account" in Quicken, and if so, what type of asset - is it "Banking", "Investing", or "Property & Debt"?

    What other related transactions have you made in Quicken? For example, what entries, if any, have been made in the 401k investment account? Are those transactions downloaded from the Plan into Quicken? Also, on the statements you receive from the 401k plan, how is the loan reflected (e.g. is it shown as loan receivable on the statement)?

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  • donnellonmjr
    donnellonmjr Member ✭✭
    The first thing I tried was setting up a loan account in quicken as if I borrowed from a bank. So, Yes, this loan is being amortized as I make payments, but I cannot link this loan to my investment account to show the principle and interest payments as a deposit back into the investment account.

    After researching this issue online, I found a recommendation to create an 'Other' Property & Debt Asset as if I were lending a my money to a third party and then convert it to a loan. Both of these options created an 'account' in Quicken, however I still couldn't link this loan to the investment account.

    I have not received any statements yet and expect the statements to show the loan as a direct link to the investment account, since the investment website shows the loan linked directly to the investment account.

    All my investment accounts are set up as manual accounts and do not download transactions.

    I am expecting a paper check tomorrow and will be depositing it into my checking account. Afterwards, I will be completing a transfer of the funds into another investment holding account that is tracked in Quicken. Over the next 6-12 months will be completing a series of withdrawals from this holding account.

    My first loan payment transaction from my checking account will be on 12/6/19. I am currently showing the payment transaction manually split for the principle and interest directly into the investment account and have deleted all previously created loan and asset accounts, since they didn't serve my purpose.

    Hopefully, this may give you insight to my issue and maybe find a solution. I am also fine if Quicken may not have this capability to track personal investment loans. However, I have a hard time believing I am the only one that has borrowed from their investments and tracked it in Quicken.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • donnellonmjr
    donnellonmjr Member ✭✭
    This solution creates the loan as expected, with a bill reminder, however it still doesn't link to the principle and interest to the original investment account.

    If this solution requires me to download my transactions, My investment accounts are not set up to download. They are manual and only track their value.