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Posted by John Gregory on May 25, 2006, 1:19 pm
Please log in for more thread options I've been tagging them since I got involved decades ago. Looks like I made a
good guess.
>
> John Gregory wrote:
>> That gives me all I need to plow forward with these manual entries, JM. I
>> appreciate your help. There are after tax contributions involved but I
>> assume these entries I'm about to make won't impair my ability to gather
>> quickly whatever I'll need for tax purposes in the future. Thanks again.
>>
>> >
>> > John Gregory wrote:
>> >> The 401K options changed from the company from which I retired. They
>> >> apparently felt cost to them involving the Spartan US Equity Index
>> >> were
>> >> too
>> >> high so they gave employees the option to move into other areas.
>> >> Because
>> >> I
>> >> remained in a 401K of a retiree, I was moved into a "Fidelity US
>> >> Equity
>> >> Index Pool". Unfortunately, that fund has no symbol for Quicken to
>> >> update
>> >> daily from its current source. So... I've decided to create an online
>> >> account with Fidelity. This requires me to manually bring the record
>> >> up-to-date. The transfer took place in 2004 and my Q2005HB downloads
>> >> only
>> >> for the last 90 days. (I've read the thread concerning the work-around
>> >> but
>> >> choose not to attempt it. Just venturing into online trading and
>> >> banking
>> >> for
>> >> the first time, my plate is full enough with potential glitches.)
>> >>
>> >> I created an account to handle the online 401K transactions, connected
>> >> to
>> >> Fidelity, got the shares and current balance transferred then
>> >> disconnect.
>> >> Of
>> >> course, I'm overstated by that amount at present. My plan is to
>> >> manually
>> >> enter the transactions involving the exchange... then simply deleting
>> >> the
>> >> online entry I just downloaded from Fidelity that gave me my current
>> >> balance
>> >> after it inserted the number of shares involved in this Pool fund.
>> >>
>> >> Q1 - Anyone see any glitches coming up so far?
>> >>
>> >> Reviewing my options from the "Enter Transactions" window of my 401K
>> >> accounts, I fail to see anything so simple as an "exchange." I see
>> >> cash
>> >> and
>> >> share transfers, but the share prices of the two funds are different
>> >> so
>> >> with
>> >> "X" shares going out... thought total dollars are equal... "Y" shares
>> >> are
>> >> going in. That made me look toward a buy/sell type transaction ... for
>> >> a
>> >> split second. Then I ruled it out 'cause I don't know how that impacts
>> >> the
>> >> tax records for a 401K account. From my hard copy statement, I see
>> >> that
>> >> three entries appear; "Exchange In", Exchange Out", and "Realized
>> >> G/L".
>> >> After discussing the entries with Fidelity's Quicken assistant and
>> >> their
>> >> 401K department, we concluded that I should do nothing with that last
>> >> entry;
>> >> the other two cancel one another out in total dollars as an exchange
>> >> should
>> >> and the "G/L" - is merely a memo on results to that point ... .since
>> >> the
>> >> funds are moving into another fund.
>> >>
>> >> Q2 - Are the Fidelity folks accurate in their interpretation of that
>> >> G/L
>> >> entry? If this is going to come into play when I decide to tap this
>> >> 401K,
>> >> I
>> >> want to make sure Quicken spews out the correct info for me. At the
>> >> very
>> >> least, I think a memo referring myself to the statements for those
>> >> dates
>> >> would be wise so I can get the amounts if needed. (An additional
>> >> thought:
>> >> Such a statement may appear each time one leaves a fund involved in
>> >> 401K
>> >> activity. If so, maybe there's some report in Quicken that picks all
>> >> these
>> >> G/L's up and identifies them?)
>> >>
>> >> Q3 - What type of action do I chose from that "Enter Transaction"
>> >> window?
>> >
>> > The Sell & Buy is the correct transaction sequence for your 'exchange'
>> > of funds. The 'realized gain' has no future tax implication in the 401k
>> > account.
>> >
>> > There is no differentiation between dividends, interest, capital gains,
>> > etc down the road. Your 401k is simply a pool that [hopefully :<)]
>> > grows. Distributions are then simply ordinary income for tax purposes -
>> > assuming your contributions are 100% pre-tax. If you have made
>> > after-tax contributions then there is some calculation involved to
>> > split distributions between taxable and non-taxable.
>> >
>> > The best analogy that I have seen for a 401k type account is to look at
>> > the account as a 'black box'. You and your employer put money in - it
>> > grows by some fashion - upon retirement you take money out. How it
>> > grows has no significance from a future tax standpoint. The reason for
>> > tracking the various transactions, income, etc is purely for your own
>> > purpose of measuring performance and making decisions to maximize the
>> > gain.
>> >
>
> Re: After Tax Contributions to 401k:
>
>>From what I have read on the subject, the key item to track here is the
> cumulative total of these contributions. I flagged these transactions
> by including a unique memo entry such as 'Aft-Tax 401k Contrib'. One
> can then filter an investment transaction report to include all
> transactions with this memo. Another approach is to append a class such
> as 'AT' to the category for each of these transactions.
>
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