[GNC] Deferred Income

[Michael or Penny Novack]

Let me ask you a question (that should make it obvious what one* of your 
problems is --- and yes, this has been discussed before)

HOW did you record this deferred income when it was received? Or since 
it might have been received before you began using gnucash, how did you 
enter the accumulated deferred income when you started with gnucash? 
Forget for just a moment that the term "deferred income" in it << you 
might not be using an account of type "income" to track it --- types 
income and expense are temporary accounts of fundamental type equity and 
would be zeroed out IF you did an actual "close the books" -- you 
presumably want this amount in a standing account, one that persists 
through a "close the books"

Hint --- suppose I were starting to use gnucash and I had an IRA balance 
of $500,000 and all of that is "deferred income" (not taxed yet, so will 
be when withdrawals taken). HOW did I record that starting balance? NOT 
by using the "starting balance tool". I would have an account under 
equity with a name like ":deferred income" and I would enter a 
transaction debit   Assets:Investments"IRA and credit Equity:Deferred 
Income << in other words, it IS part of my equity, just kept separate >>

Now we are taking a distribution (your transaction)  You would have the 
first two lines right but that would be a CREDIT to Income:Taxable:IRA 
distributions and a DEBIT to Equity:Deferred Income        And no, you 
are NOT decreasing your total equity (because an account of type income 
is a temporary account of fundamental type equity --- so no net change 
to equity)

Michael D Novack

PS: IF you never kept the accumulated deferred income as a separate part 
of equity don't try to go back and fix that. Just use equity itself for 
the second debit.

* The other is that you don't seem to understand the "sense" of an 
account of type "income". That's where your wrong sign comes from




On 1/15/2024 11:52 AM, R Losey wrote:
> Last year, there was a discussion here about tracking taxable distributions
> from IRAs which included a deferred income account. I had not been tracking
> taxable income, and thought that this would be good, so I tried to do this
> last year, but I think I did it incorrectly. I wanted to avail myself of
> the knowledge and wisdom here.
>
> I have "Deferred Income" as an "Income" account. When I take out, say,
> $1000.00, I made the following split:
>
> Assets: Investments: IRA                     credit $1000.00
> Assets: Current Assets: Checking:       debit $1000.00
> Income: Taxable: IRA Distribution         debit $1000.00
> Income: Deferred Income                     credit $1000.00
>
> I suspect that I have the last two entries reversed because the IRA
> Distribution balance is negative, and all other income accounts are
> positive.
>
> I don't remember if I created the "Deferred Income" account; perhaps it
> should not be under "Income"?
>
> Many thanks!
>

-- 
There is no possibility of social justice on a dead planet except the equality of the grave.