How should I record a distribution from an IRA account into a checking account?

SteveR · September 2020

The problem I'm having is 1) accounting for the correct share balance, 2) recording IRA income, and 3) recording tax withholding.

I've seen several discussions, but they don't seem to be solving all the problems. The last one I tried was 1) a sell transaction for the # of shares and the $$ amount (seems to work), 2) a cash transfer out from the IRA cash balance to my checking account. When the cash appears in the checking account, I can't change cash transfer into the checking account to record it as IRA income.

q_lurker · September 2020

See this FAQ:
https://community.quicken.com/discussion/7185138/faq-how-to-do-an-ira-distribution-as-a-transfer-of-stock Wrong link

Right Link
https://community.quicken.com/discussion/7072150/faq-best-way-to-handle-distributions-from-ira

The aspect of reporting as IRA income is in appropriate tax reports and the setting for the IRA account on treatment of Transfers Out (Edit Account Details, Tax Schedule)

Jim_Harman · September 2020

And if you think Quicken should make improvements in this area, please vote and comment on this Idea post
https://community.quicken.com/discussion/7864626/improve-handling-of-ira-distributions-qcds-and-roth-conversions

To vote, click on the little up-arrow under the vote count in the big blue box. Every vote counts!

Tom Young · September 2020

" I can't change cash transfer into the checking account to record it as IRA income. "

You don't change it. Literally, it's a transfer of cash from the IRA Account to your checking Account. That's simple GAAP accounting and that's what Quicken is using.

For tax purposes, you set up transfers from the IRA to checking as as a taxable event, (a dollar amount that will be reported on a 1099-R), by editing the IRA Account, clicking the "Tax Schedule" button down at the bottom, and setting up transfers out as a taxable event.:

Image: https://us.v-cdn.net/6031128/uploads/editor/me/zyetrfs6rqf8.jpg

This will show up on your various Tax reports.

For "regular" reporting purposes, e.g.,. an Income & Expense by Category report, you'd customize the report to make a transfer out of this Account show up as a line of "income", reading FROM [IRA Account Name]. You should really only handle the transfer this way if your reporting isn't picking up income from the IRA itself, otherwise you'll double count your income.

Rocket J Squirrel · September 2020

Total IRA taxable distrib. is the tax line item you want, not gross.

Tom Young · September 2020

@Rocket J Squirrel

Since we have only two small retirement accounts where we've taken distributions and where the entire distribution is taxable, I don't think I've never noticed that separate "Total IRA taxable distrib." The import into TurboTax from Quicken places our gross distributions out of these accounts on the correct (taxable) line of Form 1040.

It seems like using the "Total IRA taxable distrib." would be appropriate where you have a traditional IRA or other retirement account with basis, but off the top of my head I can't think of how that would work in this situation. Quicken doesn't track the tax attribute of basis - different than your basis in the securities in the account - so I can't even think of how you'd get this to work.

I'm not sure of the distinction between the "gross" and "taxable" distribution selections.

Rocket J Squirrel · September 2020

Quicken Tax Planner looks at taxable distrib and ignores gross distrib.

How should I record a distribution from an IRA account into a checking account?

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