rollover from 401k or IRA into another IRA treated as a contribution, why?

Posted by Scott Lindner on March 11, 2007, 11:46 am

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I'm using Quicken Premier 2007 for Windows. I have been moving my 401k and
Traditional IRA money into a new Traditional IRA account managed by a
financial planner. When I transfer the funds to this new IRA account
Quicken asks if it's a distribution, and then what tax year the contribution
applies to. The way I see it, it's neither of these. I suspect the basis
behind these questions if for tax planning purposes in Quicken. Is this
true? Wouldn't this affect the tax plan because Quicken is making incorrect
assumptions for why and how these funds are being taken out or put into IRA
accounts?

What is the appropriate way to handle this situation in Quicken?

Cheers,
Scott

Posted by R. C. White on March 11, 2007, 3:04 pm

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Hi, Scott.

You DID make the transfer DIRECTLY from Trustee to Trustee, didn't you?
430 No such article
Hi, Scott.

You DID make the transfer DIRECTLY from Trustee to Trustee, didn't you?
Getting the assets into your own hands, even for an instant, is a BIG no-no!
And your financial planner certainly should know this rule.

I've been retired for over a decade and I've never used the retirement
accounts in Quicken, so you'd better check this with your own CPA.

RC
--
R. C. White, CPA
San Marcos, TX
(Retired. No longer licensed to practice public accounting.)
rc@grandecom.net
Microsoft Windows MVP
(Currently running Vista Ultimate x64)

> I'm using Quicken Premier 2007 for Windows. I have been moving my 401k

> and Traditional IRA money into a new Traditional IRA account managed by a

> financial planner. When I transfer the funds to this new IRA account

> Quicken asks if it's a distribution, and then what tax year the

> contribution applies to. The way I see it, it's neither of these. I

> suspect the basis behind these questions if for tax planning purposes in

> Quicken. Is this true? Wouldn't this affect the tax plan because Quicken

> is making incorrect assumptions for why and how these funds are being

> taken out or put into IRA accounts?

> What is the appropriate way to handle this situation in Quicken?

> Cheers,

> Scott

Posted by Martin K on March 11, 2007, 5:52 pm

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R. C. White wrote:

> Hi, Scott.

> You DID make the transfer DIRECTLY from Trustee to Trustee, didn't you?

> Getting the assets into your own hands, even for an instant, is a BIG

> no-no! And your financial planner certainly should know this rule.

> I've been retired for over a decade and I've never used the retirement

> accounts in Quicken, so you'd better check this with your own CPA.

> RC

Whoa RC, I have been retired for two years now and all of my and my
spouse (also retired) Vanguard retirement accounts are in Quicken. These
include ROTH IRA and traditional (and rollover IRA's with brokerage
accounts). Before they were Vanguard accounts they were 401K accounts
(with our last employers) with Fidelity which we rolled directly to
Vanguard after we were retired.

Why don't you track your retirement accounts in Quicken? Quicken
provides a very convenient way to keep track of these accounts on
a daily basis.

BTW, I look forward to your replies to various problems that users have
with Quicken along with your general accounting knowledge.

Thanks
Marty

Posted by R. C. White on March 19, 2007, 4:20 pm

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Hi, Marty.

> Why don't you track your retirement accounts in Quicken?

Because I don't have any retirement accounts. At least, none that are
typically referred to by that phrase. I've never had a Keogh or an IRA or
any other such account. That's because of a combination of my personal
investment philosophy - and timing. At about the time my CPA partnership
was ready to consider such a plan for our employees and partners in the late
1970's, I retired from the partnership. My later individual proprietorship
took a while to become profitable, so I was not eligible to start a plan.
(You gotta have net income; losses don't qualify.) And soon my income was
all from investments, not earnings, so such a plan was not available.
Remember that many of the current provisions (like Roth) were not available
in those olden days.

As to philosophy, I don't care to start a long thread about it. Suffice it
to say that I never liked the idea of putting myself into a position where
the government might tax me for using my own savings, and even to penalize
me for using my money too soon or too little at a time. My philosophy was
to pay my taxes on my earnings so that whatever is left over is mine to keep
and to invest as I see fit, not as some Congressman thinks I should. And I
don't need permission from Congress or the IRS or anybody else to spend my
savings when and as I choose.

I know that I'm in the minority on this topic. Your mileage may vary. ;^}

RC
--
R. C. White, CPA
San Marcos, TX
(Retired. No longer licensed to practice public accounting.)
rc@grandecom.net
Microsoft Windows MVP
(Currently running Vista Ultimate x64)

> R. C. White wrote:

>> Hi, Scott.

>> You DID make the transfer DIRECTLY from Trustee to Trustee, didn't you?

>> Getting the assets into your own hands, even for an instant, is a BIG

>> no-no! And your financial planner certainly should know this rule.

>> I've been retired for over a decade and I've never used the retirement

>> accounts in Quicken, so you'd better check this with your own CPA.

>> RC

> Whoa RC, I have been retired for two years now and all of my and my spouse

> (also retired) Vanguard retirement accounts are in Quicken. These include

> ROTH IRA and traditional (and rollover IRA's with brokerage accounts).

> Before they were Vanguard accounts they were 401K accounts (with our last

> employers) with Fidelity which we rolled directly to

> Vanguard after we were retired.

> Why don't you track your retirement accounts in Quicken? Quicken provides

> a very convenient way to keep track of these accounts on

> a daily basis.

> BTW, I look forward to your replies to various problems that users have

> with Quicken along with your general accounting knowledge.

> Thanks

> Marty

Posted by Martin K on March 20, 2007, 9:11 am

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R. C. White wrote:

> Hi, Marty.

>> Why don't you track your retirement accounts in Quicken?

> Because I don't have any retirement accounts. At least, none that are

> typically referred to by that phrase. I've never had a Keogh or an IRA

> or any other such account. That's because of a combination of my

> personal investment philosophy - and timing. At about the time my CPA

> partnership was ready to consider such a plan for our employees and

> partners in the late 1970's, I retired from the partnership. My later

> individual proprietorship took a while to become profitable, so I was

> not eligible to start a plan. (You gotta have net income; losses don't

> qualify.) And soon my income was all from investments, not earnings, so

> such a plan was not available. Remember that many of the current

> provisions (like Roth) were not available in those olden days.

> As to philosophy, I don't care to start a long thread about it. Suffice

> it to say that I never liked the idea of putting myself into a position

> where the government might tax me for using my own savings, and even to

> penalize me for using my money too soon or too little at a time. My

> philosophy was to pay my taxes on my earnings so that whatever is left

> over is mine to keep and to invest as I see fit, not as some Congressman

> thinks I should. And I don't need permission from Congress or the IRS

> or anybody else to spend my savings when and as I choose.

> I know that I'm in the minority on this topic. Your mileage may vary. ;^}

> RC

Thanks for the reply, I didn't think of the obvious answer.

As to your philosophy, I am sure you are not the only one that feels
this way. But I can say without reservations that having access to
a 401K plan made it a much easier, and painless way to save for
retirement. Without the 401K plan I would not have been able
to retire at 61.

In any case I have been monitoring this newsgroup for awhile now
and I always look forward to the replies to the questions
that you and other regulars post. Don't stop.
Marty