RMD - Trouble Creating Split For Taxes

The transaction needs to be manually entered into a taxable receiving account (checking?), not in the investment account.

Enter a deposit (income) transaction into the checking account register for $4000.

Then split the category as follows. The sum of the splits must equal the $4000 transaction dollar amount.:

• LINE 1: Enter a transfer category….[name of the IRA]….with $5000 for the amount (a positive number).
• LINE 2: Enter the Fed tax category with the amount being -$750 (a negative number).
• LINE 3: Enter the State tax category with the amount being -$250 (a negative number).

For me, one of my RMD transactions looks like this:

Since I have a couple of fixed dollar amount IRA distributions each month, I set up a recurring Income Reminder (NOT a Transfer Reminder) for each one. It works really well in capturing the total taxable distributions and taxes withheld in the Tax Schedule and Tax Summary reports as well as in the Tax Planner tool.

Note: If the taxable distribution amount is not being captured in these reports and in Tax Planner, go to the General Tab of Account Details for the IRA account. Click on the Tax Schedule tab and make sure that the Tax Line Item for Transfers from this account = 1099-R:Total IRA taxable distrib. I have sometimes seen this default to 1099-R:Total IRA Gross distrib. which is wrong and must be corrected if that is what is shown.

One last thing: The transactions the brokerage downloads into your IRA will likely be:

1. A security Sell transaction for $4000 with the cash transferred to your checking account
2. A security Sell transaction for $750 with the cash withheld for Fed tax.
3. A security Sell transaction for $250 with the cash withheld for State tax.

Each of these 3 transactions will need to be edited to have the cash generated from them deposited to the IRA account's cash balance. If this is not done, the RMD transaction will effectively be duplicated in the the IRA account causing an account imbalance.