Exchange of Shares In 401K

The 401K options changed from the company from which I retired. They apparently felt cost to them involving the Spartan US Equity Index were too high so they gave employees the option to move into other areas. Because I remained in a 401K of a retiree, I was moved into a "Fidelity US Equity Index Pool". Unfortunately, that fund has no symbol for Quicken to update daily from its current source. So... I've decided to create an online account with Fidelity. This requires me to manually bring the record up-to-date. The transfer took place in 2004 and my Q2005HB downloads only for the last 90 days. (I've read the thread concerning the work-around but choose not to attempt it. Just venturing into online trading and banking for the first time, my plate is full enough with potential glitches.)

I created an account to handle the online 401K transactions, connected to Fidelity, got the shares and current balance transferred then disconnect. Of course, I'm overstated by that amount at present. My plan is to manually enter the transactions involving the exchange... then simply deleting the online entry I just downloaded from Fidelity that gave me my current balance after it inserted the number of shares involved in this Pool fund.

Q1 - Anyone see any glitches coming up so far?

Reviewing my options from the "Enter Transactions" window of my 401K accounts, I fail to see anything so simple as an "exchange." I see cash and share transfers, but the share prices of the two funds are different so with "X" shares going out... thought total dollars are equal... "Y" shares are going in. That made me look toward a buy/sell type transaction ... for a split second. Then I ruled it out 'cause I don't know how that impacts the tax records for a 401K account. From my hard copy statement, I see that three entries appear; "Exchange In", Exchange Out", and "Realized G/L". After discussing the entries with Fidelity's Quicken assistant and their

401K department, we concluded that I should do nothing with that last entry; the other two cancel one another out in total dollars as an exchange should and the "G/L" - is merely a memo on results to that point ... .since the funds are moving into another fund.

Q2 - Are the Fidelity folks accurate in their interpretation of that G/L entry? If this is going to come into play when I decide to tap this 401K, I want to make sure Quicken spews out the correct info for me. At the very least, I think a memo referring myself to the statements for those dates would be wise so I can get the amounts if needed. (An additional thought: Such a statement may appear each time one leaves a fund involved in 401K activity. If so, maybe there's some report in Quicken that picks all these G/L's up and identifies them?)

Q3 - What type of action do I chose from that "Enter Transaction" window?

Reply to
John Gregory
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The Sell & Buy is the correct transaction sequence for your 'exchange' of funds. The 'realized gain' has no future tax implication in the 401k account.

There is no differentiation between dividends, interest, capital gains, etc down the road. Your 401k is simply a pool that [hopefully :

Reply to
JM

That gives me all I need to plow forward with these manual entries, JM. I appreciate your help. There are after tax contributions involved but I assume these entries I'm about to make won't impair my ability to gather quickly whatever I'll need for tax purposes in the future. Thanks again.

Reply to
John Gregory

Re: After Tax Contributions to 401k:

cumulative total of these contributions. I flagged these transactions by including a unique memo entry such as 'Aft-Tax 401k Contrib'. One can then filter an investment transaction report to include all transactions with this memo. Another approach is to append a class such as 'AT' to the category for each of these transactions.

Reply to
JM

I've been tagging them since I got involved decades ago. Looks like I made a good guess.

Reply to
John Gregory

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