[GNC] I don't understand this IRA distribution solution

[Morris Beavers]

I am an ex-quicken user, with no formal accounting training (only
gnucash manuals).

I hope to track money between my banking accounts, identify who is
receiving payments, and budget (income >= expense).

I started by using the wizard for common + investment accounts.

I didn’t see a problem until my investments generated an IRA distribution
with money to federal, state, and checking. I didn’t want to record the
federal, state deductions as an actual cash expense so I created an
“Investment Expense” root expense account to track the payments.

Now a new year has started and I’m trying to reuse my account tree but I
can not identify why the budget income is not reporting the sum of the
income sub-accounts.

Thinking my IRA distribution solution was the root of the problem I found
in gnucash-user “Accounting Treatment of Taxable IRA Distributions” thread.
There is a statement of a solution which I do not understand, “How did you
open your books? I bet your opening transaction had the balancing amount of
that IRA lumped into equity. But you should instead had it as a "deferred
income" under equity (a child). The equity total still correct, but now it
becomes easy for you to "undefer" that income as you take a distribution.
Understand? The distribution has TWO effects. One is to reduce the IRA
balance as it increases money in your checking account. The second is to
"undefer" that amount of income, reduce "deferred" and increase current
income (your regular income account).”

Would someone please explain this solution as accounts and transactions?

Thanks, very much,
Morris