track loan from my 401k

[Robin Chattopadhyay]

Unfortunately, I don't think it's as simple as that.

Issuing a 401k loan is actually more like a distribution from a
participant's account. Maria notes -- correctly -- that the statement shows
a sale of the various funds in the account. It is the cash raised from
these sales that funds the money going into the checking account. You can't
then create a liability as a sub-account of the 401k because then you would
be double-counting the cash raised. From an accounting perspective, it's a
transfer from one Asset sub-account (401k) to another Asset sub-account
(checking)

Likewise, when the loan repayments are made, it's more like an additional
after-tax contribution to the 401k account. Both the "interest" and the
"principal" portions are invested according to the same allocation as the
payroll contributions are at the time the payment is made. But the interest
isn't really an expense because it becomes part of your account. It's a
credit to the WAGE INCOME account and a debit to the individual investment.

LOAN ISSUANCE:
Credit to 401(k) account --> $(1,000)
Debit to Checking --> $1,000

LOAN PAYMENT
Credit to Income --> $120
Debit to 401(k) (Principal Portion) --> $(100)
Debit to 401(k) (Interest Portion) --> $(20)

I think the best you can do withing GC is to note in the description field
in any transactions in the 401k account which portion is due to a
contribution, and which is due to principal/interest.

Robin

On Tue, Jan 17, 2012 at 1:27 PM, Tom Collier <tom.collier at comcast.net>wrote:

> You'd track it like any other loan...it's just from yourself to
> yourself.
>
> Create a new Liability account called "401k" Loan or whatever you want
> to name it. The Opening Balance would be whatever your original loan
> amount is.
>
> Then, if you don't already have one, also create an "interest paid"
> account under Expenses.
>
> As you make payments on the loan, you'll split each payment: $xxx to
> principal reduction, and allocated to your 401k liability account, and
> $xxx allocated to interest expense, until it's paid down to a zero
> balance.  Your statement should give you the split, as in $$$ to
> principal reduction, $$$ to interest.
>
> Tom
>
> On Mon, 2012-01-16 at 17:17 -0500, Maria Iano wrote:
>
> > What is the best way to track a loan from my 401k to myself. My 401k
> > statement shows it as a withdrawal that reduces the balance, and my
> > checking account shows the amount has been deposited in the account.
> > I'm not sure how to track it within gnucash so I can see my
> > outstanding liability.
> >
> > Thanks,
> > Maria
> >
>
>
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