I'd rather have it correct now than worry about some issue down the line.
Thank you for nit-picking. I won't have to manually edit all the transaction
lines as they download.

"Michael Gordon" wrote:

- quote -

From a nit-picking point of view, the income is not tax exempt, but -- as
you say -- tax-deferred. There's no need to categorize it as tax exempt if
the account is not taxable.

--
Michael Gordon


"Vespasian" <Vespasian[at]discussions.microsoft.com> wrote in message
news:B4A75E7D-E72F-4449-B23F-9DAC0DF2D535[at]microsoft.com...
- quote -

True and a good addition. The 401k manager vs. Balance is just lame, not the
least of which is because it's been more or less broken for a decade.

"Michael Gordon" <gordonm[at]denison.edu> wrote in message
news:%232oV7rCaHHA.5044[at]TK2MSFTNGP05.phx.gbl...
- quote -

Thank you very much. That helped clear it up a bit.

I won't be able to repay you on this one since I'm so far behind you in
knowledge of this product, but I'll try to pass on the help to someone, if
not here, elsewhere in the MS discussion groups.

FYI, I am using MS Money Deluxe 2006 with Advanced Register. In Money, my
Schwab account has Investment Transactions, and Cash Transactions sections.
Each has an individual account register. The real life cash is tossed into a
money market account or something, but the changes to cash just download into
Money as interest in the Cash Transactions account register, since that's all
that is adding to it at the moment. I just mark that as Interest : Tax
Exempt, since the real life account is tax deferred.

Now I am off to add/fix some "transfer to:" fields...

Vespasian

"Dick Watson" wrote:

- quote -

A specific point:
Money -- for mysterious reasons -- has always treated a "retirement account"
differently than an investment account designated as "tax-deferred". It's
much harder to reconcile the former, so some people prefer the latter.

--
Michael Gordon


"Dick Watson" <littlegreengecko[at]mind-enufalready-spring.com> wrote in
message news:%23FXPiyBaHHA.3272[at]TK2MSFTNGP03.phx.gbl...
- quote -

snip

- quote -

comments inline

"Vespasian" <Vespasian[at]discussions.microsoft.com> wrote in message
news:A08B06C8-7987-4232-8CC3-5E88EA8C6F25[at]microsoft.com...
- quote -

OK. A "Retirement" Investment Account is just an Investment Account that is
treated differently by the tax stuff.

- quote -

First let's clear up some demographics. What version of Money? What edition?
What type of registers are you using? My answers apply to M04 and earlier or
M05 and later with Advanced Registers and NOT toMoney Essentials (MEss for
short).

Investment Accounts in Money usually (and retirement marked Investment
Accounts always) have two separate portions or accounts and two separate
registers: The "Investment Account/Register" and the "Investment Cash
Account/Register". This mimics the behavior of many brokerage and IRA/401(k)
accounts that can hold cash and investments. IF your Investment Account in
Money has an associated Cash account, you will see this when you go to the
Investment Account Register as a "Cash Transactions" link over on the left
side of the register. If that isn't there, the Money Investment Account
isn't setup for cash.

You say your real world account has "investments (stock) and cash" and that
it "downloads all into the same MS Money investment account". Where does it
put the cash? In a Money Market Fund Investment? (Some brokerages--Fidelity
for one--insist on doing it this way.)

Earlier you had said "now some of my dividends are listed in both the cash
and investment transaction registers, and some only in the cash." This
sounds like you are already seeing both an Investment Register and an
associated Investment Cash Register. That's a good thing and aligns with the
expectations listed two paragraphs back.

So, back to Dividends showin in both accounts. This a good thing, generally,
for dividends paid out and not reinvested as noted earlier. If you click on
one of the dividend transactions in the cash register, it should say "The
transaction can be only be changed from the account where you entered it.
...." IF it says this, that proves that the transaction you are seeing in the
Cash register is just the other half of a Dividend investment activity entry
in the Investment register. This is the ideal case.

If, on the other hand, it lets you edit this one and there is a similar
entry for the same amount on the same date in the Investment register, then
this is Yet Another artifact of downloading brain damaged data from the FIs.
The Cash account transaction is probably showing some Income category. But
the transaction has nothing internal in Money's data to tell it that it's
the other half of the Investment transaction. The Investment register
transaction, on the other hand, probably has the Transfer: field blank. This
is workable but not how Moneyw as designed to work optimally. Optimally, you
can delete the cash transaction, and go to the investment transaction and
set the Transfer to: field to point to the Investment Cash account.

Now, as to why you have some that only show in the Investment register. If
the Transfer to: field is blank, it means that the cash account transaction
WILL NOT appear automagically. If this is so and there is no separate,
second, Cash transaction downloaded, then you will see the case of a
dividend in the Investment regsiter and the money just effectively
disappears from your Money data. Again, the remedy is to edit the investment
transaction and set the Transfer to: field to point to the Investment Cash
account.

- quote -

See above. Sounds like this is already what you have and what is happening
at some level.

- quote -

Yup. This is the best case described above.

- quote -

Yup. This is the best case described above.

- quote -

It sounds like you are on the right track. The hurdle you will have to clear
is understanding how Money transactions work so that you can clean up any
problems in the downloaded transactions data. Once you get over this hurdle
it will not be nearly as much effort.

Hello,

Thank you for your help.

- quote -

Switch the investment account over to a retirement account. I've seen the
prompt to do so, but I cancelled until I'm ready.

I'm having a little bit of a problem following the dividend response. I
think you're describing one of the two ways I already have some of these
entered. Two accounts? I have a retirement account. In it, I have
investments (stock) and cash. It's all the same account number, and hence
downloads all into the same MS Money investment account. Maybe you are
suggesting that I (should?) have separate MS Money accounts, with one to hold
the cash portion, and the other to hold the stock. I would have to manually
separate all the transactions as I download them.

I'll ask if I'm right this way.....

If I have dividends entered as you said, and I click on the cash transaction
to edit it, should I get a prompt that says "This transaction can only be
changed from the account where you entered it. Do you want to switch to that
account now?" If I choose the view all transaction details option instead of
top line only, what I expect to be the 'top line' payee field becomes blank
instead of "Dividend : StockName" like it says in top line only mode.

As far as the distributions are concerned.. phew.. it's going to take me a
bit to absorb it all. I was hoping to use Money to make it easier to do
taxes, and I'm willing to take some time to iron everything out before I have
years worth of data accumulated that I would have to fix later, but it
appears it may not be worth the effort.

Again, thank you for your help.

Vespasian

Comments/answers inline...

"Vespasian" <Vespasian[at]discussions.microsoft.com> wrote in message
news:17EE03D5-853C-4343-A2B0-2A1E9A2A9EFC[at]microsoft.com...
- quote -

None I'm aware of. There is all of the help documentation.

- quote -

Switch it over to what?

- quote -

IF downloading weren't involved (this screws everything up, especially for
new users) and assuming that you are not reinvesting every dividend, then
each dividend from an Inverstment should show up as opposite sides of teh
same one transaction entered in the Investment regsiter. Investment
Transaction for an Investment Activity Dividend for Investment [name of
investment] with a Transfer Account of [investment account cash portion
name]. The Investment Account entry reflects the Investment having paid the
dividend. The Investment Cash Account portion (the other half of a Transfer)
reflecting where the cash that got added to the cash account came from.

- quote -

Distributions are harder becasue they are taxable income while not being
accounting income. Here's a draft answer from the http://umpmfaq.info
database that hasn't yet been posted to the web (I've been very busy lately
with real life and am backlogged on m.p.m life):

---
The question frames the issue. This transfer from a tax-deferred Investment
account to a Cash Account is not Income in the accounting sense. It's
already your money. You didn't get richer by moving it from the tax-deferred
account to the cash account. Thus, in the accounting sense favored by Money,
Transfer is correct and categorizing it as Income isn't correct. But the
problem is that the IRS treats money coming out of the tax-deferred accounts
as taxable earned income. (Even that is a muddled picture. If the principal
includes after-tax contributions, then not all of the
distribution/withdrawal is treated for tax purposes as taxable earned
income.)

While the Tax Estimator in Money is smart enough to ignore various earnings
in the accounts set as tax-deferred, it isn't smart enough to deal with
distributions/withdrawals from these accounts. (The before/after tax
contributions problem may be one of the reasons they've elected to "not go
there.")

So how do you get Tax Estimator and the tax reporting to deal with your
distribution/withdrawal?

There are a number of possible ways, each of them imperfect. Possibilities
include:

You can use some tool besides Money to manage the tax estimating.

You can enter the income in Tax Estimator by hand. You can do this buy going
into Tax Estimator, on the Income page. click on the Wages income link, and
then use the option to add additional income that's not in your Money file.

If you do not have an Investment Cash Account associated with the Investment
Account that you are selling down, your choice is probably limited to the
"two transaction" method posted by Cal Learner--MVP. This is doing the Sell
transaction with no Transfer To account for the proceeds in one transaction
and doing an Income transaction, for the same amount, in the cash account
receiving the funds. One downside to this is that the transactions are not
joined in any logical way in Money, only in your head.

You can use the "unassigned split" option posted by Michael Gordon. Here you
to have the Transfer from the Investment Cash Account be part of a split
with a similar amount categorized as some Income Category that is set to
work and play well with the Tax Estimator, etc. The split is unbalanced--the
elements don't add up to the transaction net--to keep from "creating" money.
Say the transferred amount is $2,000; the split would have the $2,000
transfer and $2,000 of income--adding up to $4,000, not the $2,000 desired
total for the transaction. You'd tell Money you know there is unassigned
income in the split and you really want to do it that way when it complains.

If the unassigned split offends your sense of precision, a variant of this
is to add a separate expense to balance the transaction against some made-up
expense category, say Miscellaneous : Tax-Deferred Income Offset.

Jeff M suggested an interesting alternative to these last two: use a
Paycheck transaction. In this case, you'd probably have to enter the
Paycheck in the account that you are transferring the money to. (The umpmfaq
has not tested this to see which works best with Tax Estimator.) The
Paycheck would have some income on the wages tab, the after-tax tab would
have a Transfer from--in a negative amount--the Investment Cash Account. You
could either save the transaction with unassigned income or have the bogus
offsetting expense category. This method might also prove valuable for
401(k) distributions, since these distributions are typically required to
have taxes withheld. This tax withholding could be entered directly in the
Paycheck transaction. Likewise, using a Paycheck would provide a ready model
for separating the before taxed income portion of a distribution and the
after-tax, i.e., already taxed, portion.
---

- quote -

See above.

Hello,

Is there a thorough site that shows people how all sorts of transactions
should look in Money? Non-accountants like myself could use the help if it is
available.

Just to give a couple of examples...

I have a retirement account. In Money, I currently have it as an investment
account, but I will switch that over once I have everything else cleaned up.

When I set up the account in Money, I had the account for awhile, and
manually input things that didn't download, like dividends. Now some of my
dividends are listed in both the cash and investment transaction registers,
and some only in the cash. Should they be in both, or only one? Or is this
just an accounting/display choice one has to make? In this case, I didn't
have dividends reinvested, but a site that shows how that is done too would
help for the future.

Also, how do you handle distributions? When I withdraw funds, I have some of
the distribution sent straight to federal and state sources for taxes. Now
those list as taxes instead of a cash withdrawal. That doesn't make Money
reliable if I want to use it to report income, does it?

Maybe everyone needs a account that acts as a transactional slush fund to
balance everything out. Then again, you'd have to be quite experienced with
this to know what needs to be balanced out.