Gnucash and 529 plans

[Deva -]

Steve,

Based on what I have read from other posts in a different context, you could try virtual accounts to get what you want.

But first, from what I know of 529 plans, shouldn’t you be asking the plan provider to make the payment directly to the university instead of disbursing to your account? This way, you won’t have to keep track of separate virtual accounts - whatever goes out of 529 is always into a university account towards tuition and room and board. Of course, personal deductible expenses such as books, computer, etc. may have to be disbursed to your account first and then used for qualified educational expenses. Anyway, I will assume you have a reason to do what you stated, so here’s one suggestion.

Under your checking account, create a virtual sub-account (say, "529 disbursals”) as another asset.
When you make a payment to the university, you move funds from your asset checking account to the virtual asset “529 disbursals” account. And from here, make a payment to an expense account setup for college. Assuming you had nothing in “529 disbursals” account when you started, this payment will make the balance go into -ve.
Request for a disbursal from 529. When the money comes into your checking account, move the disbursed amount into “529 disbursals” account. This will make the virtual asset account balance come back to 0.

From your perspective, whenever a -ve balance exists in the virtual sub-account, then you need to make a disbursal request. If the balance is 0, all is good. If the balance is +ve, then you have made a disbursal request larger than a qualified expense towards college (so, potentially a taxable event for you).

Cheers,
Deva

On 25-Mar-2018, at 7:51 AM, <gnucash-user-request at gnucash.org<mailto:gnucash-user-request at gnucash.org>> <gnucash-user-request at gnucash.org<mailto:gnucash-user-request at gnucash.org>> wrote:

Date: Sat, 24 Mar 2018 19:21:31 -0700
From: Steve Kelem <steve at kelem.net<mailto:steve at kelem.net>>
To: Gnucash Users <gnucash-user at gnucash.org<mailto:gnucash-user at gnucash.org>>
Subject: Gnucash and 529 plans
Message-ID: <4b35ac7b-b424-a9db-ab5b-1062b546299b at gmail.com<mailto:4b35ac7b-b424-a9db-ab5b-1062b546299b at gmail.com>>
Content-Type: text/plain; charset="utf-8"

  I have a question about recording 529-plan transactions in GnuCash.

  Not the basic movement of funds between checking and 529 account, as
  discussed 7 times in the GnuCash archives.

  There are two aspects of the 529 plan. The first is getting money into
  and out of the 529 account. Easy peesy. Already solved.

  The second is making sure that all of the expenditures for the 529 plan
  (tuition, books, room and board), are matched by a corresponding
  withdrawal from the 529 account. That's the part that I don't
  understand how to do. The payment transaction already has a source (my
  checking account) and a destination (the account representing how much
  I've paid to the university. Similarly for the 529 account
  disbursement. How do I keep track of whether I've requested enough
  disbursements?

  Ideally, when I pay for tuition, for example,
   1. The funds go out of my checking account into the university
   2. I need to make a disbursement request from my 529 plan
   3. The disbursement gets deposited into my bank account.

  (Repeat for books, room & board...)

  My usual problems are remembering to make the disbursement request, and
  not being able to check that I don't miss a disbursement request or
  make a duplicate request.

  It would be nice if there were an account that got a copy of the
  tuition payment and a corresponding debit for the disbursement request.
  If the account balance is zero, they I'm presumably up-to-date. If the
  balance is positive, I need to request a disbursement.

  Is there such a mechanism?

  Thanks for any help you can give,