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Subject Author Date
How to force use of _DivIncTaxFree category? Ron 02-01-2007
Posted by Ron on February 1, 2007, 5:28 pm
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 I have a question relating to categorization of investment transactions.

In a taxable investment account, I have a Fidelity MM fund whose dividends
are federal and state tax exempt. I have ticked the "tax free" status for
the fund under "edit security." I download the data from Fidelity. I use
Q2005 Premier under WinXP.

Each transaction shows up in reports categorized as _DivInc. I'd have
expected _DivIncTaxFree. Have I missed something? There is no way to
manually categorize a transaction in an investment account, AFAIK. Is there
a way to force the correct categorization on download, or to recategorize
existing entries?

Thanks for any help, Ron


Posted by John Pollard on February 1, 2007, 7:26 pm
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 Ron wrote:
> I have a question relating to categorization of
> investment transactions.
> In a taxable investment account, I have a Fidelity MM
430 No such article
Ron wrote:
> I have a question relating to categorization of
> investment transactions.
> In a taxable investment account, I have a Fidelity MM
> fund whose dividends are federal and state tax exempt. I
> have ticked the "tax free" status for the fund under
> "edit security." I download the data from Fidelity. I
> use Q2005 Premier under WinXP.
> Each transaction shows up in reports categorized as
> _DivInc. I'd have expected _DivIncTaxFree. Have I
> missed something? There is no way to manually categorize
> a transaction in an investment account, AFAIK. Is there
> a way to force the correct categorization on download, or
> to recategorize existing entries?

All of your dividends are "income"; some of them are tax free
and some are not.

Quicken separates the tax free income from the taxable income
where it is appropriate ... but Quicken does not do so based on
"category" alone.

If you look at a banking "Transaction" report that is not
subtotalled, all dividends have a category of "_DivInc". If you
subtotal that report on "Category", you will see your tax free
dividends reported in the "_DivIncTaxFree" category group ...
while their transaction category remains "_DivInc".

If you run an Income/Expense report, you will see your tax free
income reported in separate "tax free" categories from your
non-tax-free income.

If you run tax reports, you will not see your tax free income
reported at all.

Quicken does not rely solely on the "category" field to
determine the taxable nature of a transaction. Quicken uses
other information, such as the tax-free characteristic of a
security, or the tax-deferred nature of a Quicken account, to
determine whether your income is "taxable". But all that income
is still "income".

--
John Pollard
First initial underscore Last name at mchsi dot com
Please reply to newsgroup



Posted by Ron on February 1, 2007, 8:45 pm
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>
> Quicken separates the tax free income from the taxable income where it is
> appropriate ... but Quicken does not do so based on "category" alone.
>
> If you look at a banking "Transaction" report that is not subtotalled, all
> dividends have a category of "_DivInc". If you subtotal that report on
> "Category", you will see your tax free dividends reported in the
> "_DivIncTaxFree" category group ... while their transaction category
> remains "_DivInc".
>
Thank you, I see that now. But who'da guessed that there can be a
distinction between "category group" and "transaction category?" And that
the difference can only be revealed in this way?

> Quicken does not rely solely on the "category" field to determine the
> taxable nature of a transaction. Quicken uses other information, such as
> the tax-free characteristic of a security, or the tax-deferred nature of a
> Quicken account, to determine whether your income is "taxable".

I see now that it is tracking the info, but if the subtotalling trick is the
only way to break apart taxable from non-taxable income, then I'd think the
reporting engine needs some tweaking. If, for example, you had shares of
the same security in both a taxable and a tax-deferred account, and you
wanted an income report subtotalled by security name, there'd be no way (in
a single report) to further subtotal by taxable vs. non-taxable income.

-Ron


Posted by Stubby on February 1, 2007, 8:04 pm
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Ron wrote:
> I have a question relating to categorization of investment transactions.
>
> In a taxable investment account, I have a Fidelity MM fund whose
> dividends are federal and state tax exempt. I have ticked the "tax
> free" status for the fund under "edit security." I download the data
> from Fidelity. I use Q2005 Premier under WinXP.
>
> Each transaction shows up in reports categorized as _DivInc. I'd have
> expected _DivIncTaxFree. Have I missed something? There is no way to
> manually categorize a transaction in an investment account, AFAIK. Is
> there a way to force the correct categorization on download, or to
> recategorize existing entries?

I've been grumbling about this for years. My work around it to reenter
the transaction from Fidelity and classify it as MiscInc, and calling it
_DblTaxFree. This is followed by a "Buy" of the number of shares.

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