[GNC] IRA/401K income detection

D. sunfish62 at yahoo.com
Wed Mar 16 20:54:04 EDT 2022


Yeah, I get that an accountant doesn't call this income, but frankly, I don't really care about the esoterica of accounting in this case. I care about what the government says is income. Accountants can yap all day long about how the IRA payouts aren't income; the IRS is still going to fine me if I don't pay up. 


-------- Original Message --------
From: Stan Brown <the_stan_brown at fastmail.fm>
Sent: Wed Mar 16 20:32:51 EDT 2022
To: gnucash-user at gnucash.org
Subject: Re: [GNC] IRA/401K income detection


On 2022-03-16 15:09, D. via gnucash-user wrote:
> when Joe Retiree takes money from their IRA, the IRS considers it income, and taxes it accordingly. But when Joe tries to enter the transfer from their IRA to their checking account in GnuCash,  it doesn't get treated as income

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

Because it _isn't_. (The tax code's definition of income is not the same
as an accountant's.)

It is a debit to the asset of Cash/Banks, and a credit to the asset of
investments.

As several people have said, this can be record as the above simple
2-split transaction, in which case taxes are tidied up later when the
income tax is paid, or as a four-way split:

Debit:   Assets:Cash/Banks
Credit:  Assets:IRA
Credit:  Liability:Taxes payable
Debit:   Expenses:Income tax

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