[GNC] Roth IRA conversion

[Michael or Penny Novack]

On 12/18/2022 10:20 PM, Fred Tydeman wrote:
> For a USA person, when I move cash from a regular IRA (tax deferred
> account) to a Roth IRA (tax free account), besides the movement of the
> cash, I need to also somehow show that the cash moved is considered
> income.  What should be the other side of the income pair?

This is just one example (a special case, though a biggie in terms of 
amount) of the more general question of "imputed income". In other 
words, where the IRS considers that you have received income but no 
actual money coming in.

I will give a different example that probably affects more people 
(although usually by a small dollar amount) to show how IT might be 
handled. It won't be of use to Fred, except does point out that an 
accounting question, not a gnucash question.

Employers are allowed to pay the premiums of group term insurance for 
employees (it is a commonly offered benefit) and they usually offer one 
year's salary (the employees might have the option of more years, but 
THEY  pay that portion of the premium, payroll deduction). However the 
IRS considers just the premium for the first $50,000 of coverage to be a 
tax free benefit. So if the employee's salary is $60,000 and they opt 
for three year's salary ($180,000) they pay the premium on $120,000 of 
that by payroll deduction, the company pays the premium on $60,000 (the 
benefit) and the IRS considers that the employee has "imputed income" in 
the amount of the premium on $10,000 of the coverage.

What's the other side of the transaction? I'd make that "insurance 
expense" (same place that the payroll deduction for the extra years went)

Fred, you need professional accounting advice on this. It's not a 
gnucash question in the sense you;d have exactly the same question were 
you keeping your books the old fashioned way, pen and ink on paper.

Michael D Novack