[GNC] IRA/401K income detection

[Stan Brown]

On 2022-03-10 11:08, David G. Pickett via gnucash-user wrote:
> When I move money from an IRA or 401K account to my bank account and
the tax man, that is all a taxable distribution, but GNUCash mostly sees
a transfer.  How do I capture the income?

> On 3/10/2022 2:15 PM, Stan Brown wrote:
>> The same is true of making a withdrawal from your IRA. Despite the fact
>> that the tax laws treat it as income, it is not income.

On 2022-03-10 14:47, Michael or Penny Novack wrote:
> It is FAR more complex than that. It is NOT a "simple transfer" because
> the IRA or 401K was not a simple asset. It is a "tax deferred" asset
> (income you received earlier but that was (temporarily) not considered
> income for tax purposes. It is becoming income NOW (when you take a
> distribution)

Well, yes and no. Of course, a tax liability is almost certainly created
by a withdrawal from a traditional IRA. But how many people will
actually book that tax liability then? David Pickett's question did not
suggest a lot of sophistication about accounting, and therefore I
suspect he will not want to get into accruing tax liability, but rather
will record income tax as an expense when he actually pays it.

(_I_ record a tax liability when I make an IRA withdrawal, but I imagine
I'm in the minority on that.)

-- 
Stan Brown
Tehachapi, CA, USA
https://BrownMath.com