Accounting Treatment of Taxable IRA Distributions

[Paul Schwartz]

To me some of your problem comes from having listed your IRA in your
assets; it doesn't really belong to you yet. It is really a separate
entity. When you take a distribution [as I must this year], you transfer
the money from the IRA to your checking account. So, you create a
transaction that debits Checking and credits Income. Eventually, you will
also pay the associated taxes, although you may have had some withholding
done. That will alter the prior transaction.

This view is from an accounting perspective. When you think about the
present value of your net worth, you would like to include your IRA.
Present values complicate the accounting task significantly as there are
many adjustments [liabilities] that need to come into play to do it
correctly. I opt for maintaining my books on a cash basis, and generate a
stand alone balance sheet to assess current status [it ignores most of
those other adjustments needed to do the accounting properly].

HTH

Paul


On Sat, May 4, 2013 at 2:12 AM, Jay Ridgley <jridgley2 at austin.rr.com> wrote:

> Folks,
>
>  Well it it is finally time that I move money from my IRA to my checking
> account...
>
> IRA Cash Holdings ---> IRA Distributions(Taxable)
> IRA Distributions(Taxable) ---> Checking Account
>
> The IRA Distributions(Taxable) account is an Income Account, correct? How
> do I get the money that is transferred to it to show as such.
>
> When I attempt to move money from the IRA Cash Holdings account to IRA
> Distributions(Taxable) it shows up there as a Charge not as Income. Why?
>
> I am Running 2.4.10 on Ubuntu 12.04-4
>
> Cheers,
> Jay
> --
>
>
> Jay Ridgley
> jridgley2 at austin.rr.com
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