[GNC] Recommended Method of Entry for IRA Distributions

[R Losey]

Thanks. The only minor drawback is that I seem to be entering the data
twice under "Income" just to keep track of IRA distributions on their own.
But hey, it's one way to make it work.

And, as has been pointed out, since this is not really "income", it makes
sense that the transaction has no net income. I think I'll adopt this
method for 2023.

In hindsight, since the Fiduciary Trust that keeps the IRA has to report to
me on distributions, I haven't felt a need to have an account for this and
to double-check them.



On Thu, Jan 12, 2023 at 10:56 PM David T. <sunfish62 at yahoo.com> wrote:

> Two separate entries. In my mind, this would best be put in one
> transaction, to make the association obvious.
>
> CR - Assets: IRA $1000
> DB - Assets: Checking $1000
> DB - Income: Deferred Income $1000
> CR - Income: IRA Distribution $1000 *
>
> * Income: IRA Distribution is used to document the distribution for tax
> purposes.
>
> David T.
> On Jan 13, 2023, at 7:21 AM, R Losey <rlosey at gmail.com> wrote:
>>
>> Thanks for all of the information... however, getting back to the original
>> question, I'm not sure how to record IRA taxable distributions. I thought I
>> was doing it, but I am apparently not.
>>
>> Let me write through a couple of cases.  In the first one, I'm selling
>> $1000 worth (10 shares) of security A and having it go directly to my
>> checking account with no income tax withholding. (some of these may be
>> USA-centric terms; I apologize for that).
>>
>> If I can create a "Sell" transaction that sells 10 shares at $1000; the
>> other entry would be to increase my taxable distribution category by $1000.
>> But what next? My checking account doesn't have the $1000 increase, but
>> then what is the "other" category to use for that transaction??
>>
>> I looked at my data, and what I've been doing is that the other side of the
>> Sell transaction is a deposit to my bank account, but this fails because
>> there is no record of a taxable distribution.
>>
>>
>> On Thu, Jan 12, 2023 at 2:42 PM Michael or Penny Novack <
>> stepbystepfarm at comcast.net> wrote:
>>
>>  On 1/12/2023 12:41 PM, R Losey wrote:
>>>
>>>>  Thanks; I know the information is out there, but intuitively, it doesn't
>>>>  make sense to me that depositing funds to my bank account is a "debit"
>>>>  transaction to the bank. It comes from the concept of credit being "added
>>>>  to" and debit being "substracted from", I suppose.
>>>>
>>>>  Is the "Debit on the left" and "Credit on the right" true in general
>>>>  accounting, or just GnuCash?
>>>>
>>>
>>>  a) Double entry bookkeeping goes back a long way, long enough that Latin
>>>  still in use for communications among the educated in Europe. Think of
>>>  "debit" and "credit" not in terms of plus and minus (before European
>>>  math had negative numbers) but as "he owes"(me) and "he trusts" (me). In
>>>  other words  he owes me that amount and he trusts me for that amount (I
>>>  owe him)
>>>
>>>      Now look again at the bank account.In YOUR books a debit (the bank
>>>  owes you this money) and in the bank's book a credit (the bank owes you
>>>  this money)
>>>
>>>  b) Debit on the left and credit on the right. In the old days ledger
>>>  pages had two sides, one side for the debits and the other for the
>>>  credits (and no balance column). Perhaps within my lifetime it became
>>>  more common to use three column paper with debit and credit transactions
>>>  with one date, check number, description, and journal reference column
>>>  then a left for debit, a right (middle) for credit, and a balance. o a
>>>  running balance was kept << finding the balance was a process in the old
>>>  days before that >>
>>>
>>>  NOTICE -- so far pen and ink on paper, and gnucash is simply modelling that
>>>
>>>  Michael D Novack
>>>
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>>
>>
>>
>>

-- 
_________________________________
Richard Losey
rlosey at gmail.com
Micah 6:8