How do you record an Roth Conversion?

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Tom23
Tom23 Member ✭✭
edited May 2022 in Reports (Windows)
I followed the steps from the following, but I am not seeing any "income" in my Tax Schedule reports for the conversion.
https://community.quicken.com/discussion/7072150/faq-best-way-to-handle-distributions-from-ira

I have an IRA brokerage account and it is classified as an IRA. The Tax Schedule settings are set as Transfers In- 1040 IRA Contribution, Self and Transfers Out- 1099-R:Total IRA gross dist. Tax Deferred = Yes

The Roth IRA Brokerage account is classified as a Roth IRA. The Tax Schedule settings are both blank. Tax Deferred = Yes

My transaction was "Shares Transferred Between Accounts". Quicken then recorded a Removed shares from the IRA and a Added shares in the Roth IRA, but I don't see this as taxable income anywhere.

Answers

  • Rocket J Squirrel
    Rocket J Squirrel SuperUser ✭✭✭✭✭
    edited April 2022
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    Change the tax line item for transfers out of the traditional IRA to 1099-R:Total IRA taxable dist.

    The removed/added shares actions are incorrect. Sell the shares in the trad IRA, transfer the cash proceeds, and buy the shares in the Roth. 

    Quicken user since version 2 for DOS, now using QWin Biz & Personal Subscription (US) on Win10 Pro.

  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
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    My experience is that in order for a Roth conversion to be included in Quicken's Tax reports, the money must move through a taxable account. This is because tax deferred accounts are excluded from the Tax reports, as they should be. You can use a dummy taxable account to prevent the in and out transfers from affecting reports on your active accounts. I used a brokerage account.

    The sequence of transactions I have used is
    • Sell securities in the Traditional IRA using the current market value.
    • Go to the taxable account and enter a Deposit for the gross cash amount, using the Traditional account in [brackets] as the Category. If taxes were withheld, record them as a split on this transaction.
    • Still in the taxable account, enter a Withdrawal for the cash amount, using the Roth account in [brackets] as the Category.
    • Buy the securities in the Roth account
    With this sequence of transactions, the amount converted should be included in the 1099-R section of the Tax Schedule report. Variations on these transactions, such as entering an Xout in the Traditional account, do not work.
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