Problem: Same Mutual in Investment & Retirement Accounts

Maybe someone can point out how to fix reporting problem (Q2005 Premier).

I have an investment account and an IRA account. I own a number of shares of American Balance Fund in both accounts. Both bought separately with tax and tax deferred monies and at difference brokerage firms as appropriate. The problem I have is in the reinvest divindends. When dividends were paid a separate entry was recorded for reinvestment from each brokerage firm. Everything to my eyes looks normal.

When I run the tax report and or categories report both dividends show up as taxable ("_DivInc"). The IRA entry should not be showing as taxable dividend. It should be a tax-exempted dividend ("_DivIncTaxFree"). I should note, the IRA account is set as a tax deferred account and other mutual dividends within the IRA report out correctly as tax-deferred dividends ("_DivIncTaxFree").

This is the only mutual I own shares of in two types of accounts.

Does any one have an idea of what settings I may have set wrong or missed?

The '_Div' is ok for the IRA account - it does not have to indicate Tax Free.

I believe the '_DivIncTaxFree' generally applies to non-taxable dividend income paid by some securities - as indicated on their

Your problem is if, as you indicate, the IRA dividends are being reported in QW's Tax Summary or Tax Schedule Reports.

Run QW's Tax Summary Report and check Customize - see if the IRA account is checked - it should not be. You did state that the IRA is checked as Tax Deferred.

The category report will indeed report '_Div' for the same security in both accounts - unless you customize differently. A straight category report is not indicating any tax consequences.

I have the same situation in my IRA and regular investment accounts [same security in both] - have no problems with tax reporting.

You didn't miss anything and your problem is with your State and City returns.

Quicken cannot know whether or not your dividends are taxable. It can depend on the fund and what state you live in. As far as I can figure, you have to change the category when each transaction comes in. For instance, I have a Fidelity MA tax free fund and I live in MA, so I have to change each dividend to _DblTaxFree.

Maybe Intuit will add a setup variable that states what state your are filing in for tax purposes. That would allow Quicken to do it right.

State/City returns have nothing to do with this issue.

The OP indicated dividends received in a TAX DEFERRED IRA are appearing in the tax report - this is not correct.

Quicken does know [in normal behavior] that these dividends [or any other form of income] are not taxable in an IRA.

The tax free dividend category is typically for exactly the type of investment described - non-taxable diviends in a normally taxable account.

Wrong. The "_DivInTaxFree" is specifically for things like municipal bonds and municipal bond funds. Its purpose is to distinguish tax free dividends held in taxable accounts from taxable dividends held in taxable accounts. Your IRA account dividends are not taxable by definition; Quicken knows that and treats them accordingly.

That may have been what the op intended to convey; but my interpretation is that what the op actually said was that dividends in a tax free security should not have been categorized to "_DivInc": but that is not a legitamate complaint. Quicken always categorizes dividends in tax advantaged accounts to _DivInc; such a categorization does not matter, Quicken already knows that tax advantaged accounts do not have their dividends taxed and handles the tax situation based on the type of account in the case of tax advantaged accounts.

The category "_DivInc" is not definitively a taxable or non-taxable category; it depends on the type of account in which the security is held.

There are many aspects of the "categorizing" problem: (1) The type of security can be taxable, not taxable, taxable by the Fed but not the state, etc Quicken could know this and could recategorize the dividends etc. Worse, government policies change over time. (2) The account that which holds the security might be an IRA or other tax defered account. Quicken&TT know this and can handle correctly. (3) The state in which you reside will influence whether certain divieends and interest are taxable. Your state can change, but Q/TT won't know about it! (4) There are other levels of government which may tax certain securities. NYC has a City tax, I believe. But I believe US Treasury securities are exempt. Quicken has _TrplTaxFree for your use in this case.

So, It looks like Quicken has provided the hooks to let you recategorize as needed, but there are things that it can't do.

simpler tax code

Have you properly set the tax attributes for the IRA account?

Thank you all! I ran the tax summary and it reports correctly. As does the other reports when you know the meaning behind them. They report everything in that category, regardless of how tax is applied. I just didn't know what the proper definition of "_DivIntTaxFree". It all makes sense now. Again, thanks,

Steve