Withdrawing funds from a tax deferred account

[Dale Alspach]

I have the same issue. What I did was to create a new expense account
Conversion to Taxable
and double enter any transaction: once to convert the retirement fund asset
to another, e.g., checking and second as "taxable income" to Conversion to
Taxable. This is done within a single gnucash transaction. 

I do not know what an accountant would think of this. Also this may produce
some issues with certain reports. Total expenses and total income are being
artificially increased. It does give you a way to flag the income for
income tax purposes.

Dale