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IRA Distribution entry in MS$ Plus RRS feed

  • Question

  • I have an IRA acct with one CD.  How do I handle a minimum distribution from that CD when it has not yet matured.  I need to transfer X amount of dollars out of the IRA CD and into another account in MS$ Plus in order to track the transfer in the "real world" financial institution.

    I have tried Remove Shares and Transfer Out.  Neither seems to be the correct solution.

    Thanks, and I appreciate any help.

    Friday, December 31, 2010 10:06 PM

Answers

  • After experimenting again with both "Remove Shares" and "Transfer Out", I settled on "Remove Shares" as the best way to decrease the IRA CD account value.  "Remove Shares" does not affect the cash transactions side of the account where the interest earned is stored.

    I then made a new deposit entry in the bank account where I deposited the distributed amount using the category "Retirement Income: IRA Distribution".  These two entries appear to solve the problem, and the reports I have run, so far, include the correct account values.

    Maybe this will help someone else.  If you find a better way, please post your solution.

     

    • Marked as answer by Liz in Dayton Saturday, January 1, 2011 6:02 PM
    Saturday, January 1, 2011 6:02 PM

All replies

  • Return of Capital is what sprang immediately to mind--but I'm wondering whether your CD is 1 unit of $x or x units of 1 dollar. (Primarily because I'm not remembering how Money treats a CD as an Investment.) You may end up changing the original investment to make this work.
    Saturday, January 1, 2011 3:59 AM
    Moderator
  • After experimenting again with both "Remove Shares" and "Transfer Out", I settled on "Remove Shares" as the best way to decrease the IRA CD account value.  "Remove Shares" does not affect the cash transactions side of the account where the interest earned is stored.

    I then made a new deposit entry in the bank account where I deposited the distributed amount using the category "Retirement Income: IRA Distribution".  These two entries appear to solve the problem, and the reports I have run, so far, include the correct account values.

    Maybe this will help someone else.  If you find a better way, please post your solution.

     

    • Marked as answer by Liz in Dayton Saturday, January 1, 2011 6:02 PM
    Saturday, January 1, 2011 6:02 PM
  • The way I handle distributions so that they coincide with Tax Software:

    Set up in Bills: Payment from Cash portion of IRA Investment Account (I always treat CDs as Bonds - x units @ 100) to "Our IRA Pension(s)"  split as:

    • xfer to your taxable account (real amount less taxes withheld)
    • Retirement Income : IRA Distributions ( - total amount)
    • no category  ( + total amount) to balance out previous

    Also set up in Bills: Payment from Cash portion of IRA Investment Account for the taxes withheld:

    • Taxes : IRA Federal Income Tax
    • Taxes : IRA State Income Tax  

    but I arrange the maturity of CDs, so that there is money in the Cash portion of the account to handle these disbursements, so I don't know how you handle that prior to CD maturity.

    Does your bank let you prematurely pull out a portion of a CD?
    • Edited by ameridan Saturday, January 1, 2011 7:34 PM added question
    • Proposed as answer by ameridan Sunday, January 9, 2011 10:16 PM
    Saturday, January 1, 2011 7:20 PM
  • ameridan:  we had the same question as you re. drawing out funds from a CD not yet matured.  Our Credit Union assured us the IRS has approved the withdrawal because it is a mandatory distribution.
    Tuesday, January 11, 2011 8:42 PM
  • ameridan:  we had the same question as you re. drawing out funds from a CD not yet matured.  Our Credit Union assured us the IRS has approved the withdrawal because it is a mandatory distribution.

    I think Dan was wondering if that process cost you interest, or if the credit union treated it in some way that did not cause an early withdrawal penalty.
    Tuesday, January 18, 2011 9:03 PM
    Moderator
  • There was no early withdrawal penalty and there was no change in interest.
    Friday, January 21, 2011 6:41 PM
  • Nice credit union!  I'm assuming that is not standard practice or one could get a premium rate for a 30 year jumbo CD (vs laddering shorter term CDs) and just keep pulling out RMDs every year with no penalties.   I'll try to remember to ask about this at my credit unions.
    Friday, January 21, 2011 11:43 PM
  • There is not supposed to be any costs associated with an early withdrawal from an IRA CD.  I have had mine a both a bank and a credit

    union and neither charged any fees or was there a loss of interest.

    I solved the problem in Money by calling my IRA CD a regular CD account.   Then when I make my annual withdrawal, I just transfer

    the money to my checking account as taxalbe income since I have a regular IRA.  If you have a Roth IRA, then transfer the money

    as non-taxable income. 

     

    Saturday, January 22, 2011 1:26 AM