Re: [GNC] Deferred Income << the general case is "imputed income"
I appreciate the various input here; it has been educational, so I wanted particularly to add my thanks. On Tue, Jan 16, 2024 at 4:17 PM Michael or Penny Novack < stepbystepf...@comcast.net> wrote: > On 1/16/2024 1:42 PM, Adrien Monteleone wrote: > > I'm thinking of a case where someone starts using GnuCash either at > > the point they start taking disbursements or after. I'm about to help > > a family member in that exact situation. > > > > While Deferred Income wasn't tracked along the way, I'll set up the > > account with the present total as an opening balance and have them > > transfer against that each distribution. > > That's a reasonable solution. > > I'd do it under equity. You can create for them there an account with a > name like "deferred income". Presumably when you started the books for > them, the other side of the transaction(*) entering the IRA balance as > an asset was equity. All you would be doing now would be to "partition" > equity transferring the remaining IRA balance form undifferentiated > equity to ":deferred income:. > > Then as distributions are taken, the debits would be bank account and > deferred income and the credits the IRA balance and income > (current/taxable income) > > While this isn't necessary, could just debit equity, if you have the > deferred income separated out it SHOWS. I'd certainly want my balance > sheet to show that some of my net worth has a tax liability associated > with it. > > Michael D Novack > > * If you used the "starting balance" tool no explicit transaction. > > > ___ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > - > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. > -- _ Richard Losey rlo...@gmail.com Micah 6:8 ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Deferred Income << the general case is "imputed income"
On 1/16/2024 1:42 PM, Adrien Monteleone wrote: I'm thinking of a case where someone starts using GnuCash either at the point they start taking disbursements or after. I'm about to help a family member in that exact situation. While Deferred Income wasn't tracked along the way, I'll set up the account with the present total as an opening balance and have them transfer against that each distribution. That's a reasonable solution. I'd do it under equity. You can create for them there an account with a name like "deferred income". Presumably when you started the books for them, the other side of the transaction(*) entering the IRA balance as an asset was equity. All you would be doing now would be to "partition" equity transferring the remaining IRA balance form undifferentiated equity to ":deferred income:. Then as distributions are taken, the debits would be bank account and deferred income and the credits the IRA balance and income (current/taxable income) While this isn't necessary, could just debit equity, if you have the deferred income separated out it SHOWS. I'd certainly want my balance sheet to show that some of my net worth has a tax liability associated with it. Michael D Novack * If you used the "starting balance" tool no explicit transaction. ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Deferred Income << the general case is "imputed income"
I'm thinking of a case where someone starts using GnuCash either at the point they start taking disbursements or after. I'm about to help a family member in that exact situation. While Deferred Income wasn't tracked along the way, I'll set up the account with the present total as an opening balance and have them transfer against that each distribution. Regards, Adrien On 1/15/24 8:47 PM, Jediator wrote: I was wondering is it really necessary to create a separate deferred income account when you could just do a transaction report on your IRA account to see how much distribution you had in a year or a month? -- JC ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Deferred Income << the general case is "imputed income"
On 1/15/2024 9:47 PM, Jediator wrote: I am not an accountant, so please excuse my ignorance. I was wondering is it really necessary to create a separate deferred income account when you could just do a transaction report on your IRA account to see how much distribution you had in a year or a month? -- JC Yes of course, and you will get a 1099 for the distribution so you would be able to do your taxes using that. But we are keeping books. The situation is different for those of us where money is still coming in to our IRA's or 401k's. Think for just a moment how you would be recording your salary as it came in. PART of what you are getting, both your contribution and the employer's match is NOT going to be reflected in your current taxable income. It is deferred income. You presumably DO want that reflected as adding to your net worth. For those of us at the other end, those distributions might be a significant fraction of our (actual) income. If you aren't having the distribution showing up as (part of) income, you are likely to have expenses totaling more than income. You presumably do want a realistic Statement of Revenues and Expenses (P) Michael D Novack ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Deferred Income << the general case is "imputed income"
That is a good point... I just want to try to do things "properly", but as you point out, in a practical sense, it (probably) doesn't matter. Plus, it is helping my understanding and knowledge to grow, and I consider that a good thing. On Mon, Jan 15, 2024 at 8:49 PM Jediator wrote: > I am not an accountant, so please excuse my ignorance. I was wondering > is it really necessary to create a separate deferred income account when > you could just do a transaction report on your IRA account to see how > much distribution you had in a year or a month? -- JC > > On 1/15/24 5:33 PM, Michael or Penny Novack wrote: > > On 1/15/2024 4:02 PM, R Losey wrote: > >> Thank you; this is helpful. > >> > >> I never really thought about recording Deferred Income previously > >> because the investment people track it and let me know what has been > >> taken out every year. But after the discussion in this list last > >> year, I thought it might be good to track, at least the taxable > >> withdrawals. > >> > >> I see that Deferred Income should have been recorded, but it wasn't. > >> Instead of using "Opening Balance" when they were set up, the amount > >> should have been more appropriately credited to Deferred Income, right? > > > > > > The fact that the government considers the TRANSFER of assets between > > two asset accounts (the IRA and checking) to be a taxable event even > > though no new money coming in can be considered as special case if > > "imputed income" and you COULD simply treat all imputed income > > situations the same. > > > > For example --- you might have as an employee benefit employer paid > > group term insurance and your employer might even offer options like 5 > > years salary. Now the US government considers up to $50,000 face value > > a non-taxable benefit but the premium for coverage above that amount > > as "imputed income". In other words, this will appear on your pay stub > > as part of your total taxable income even though you didn't actually > > receive that as money. > > > > Well in the big split where you enter your salary you could handle > > that little piece using equity for the other side. As I have already > > noted, NOT actually changing total equity to both debit and credit > > equity by the same amount (the credit side being an income account, > > but both income and expense accounts "really: of type equity and the > > net of all unclosed income and expense accounts appearing with equity > > as "retained gains (or losses)" > > > > Some of us had to deal with other "imputed income". Thus if we had a > > "split dollar" insurance benefit* the premium for that amount of term > > coverage would show as an "imputed income" amount. > > > > Michael D Novack > > > > * The employer buys a cash value type policy on your life, and pays > > the premium. You get the right to name the beneficiary and the option > > (if you leave) to either buy and keep the policy (pay the employer for > > those premiums) or have the policy surrendered and keep the difference > > (after several years the policy should be worth more than the sum of > > the premiums paid in). In other words, you have a favorable "adverse > > choice" situation <> > > > > ___ > > gnucash-user mailing list > > gnucash-user@gnucash.org > > To update your subscription preferences or to unsubscribe: > > https://lists.gnucash.org/mailman/listinfo/gnucash-user > > - > > Please remember to CC this list on all your replies. > > You can do this by using Reply-To-List or Reply-All. > > ___ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > - > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. > -- _ Richard Losey rlo...@gmail.com Micah 6:8 ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Deferred Income << the general case is "imputed income"
I am not an accountant, so please excuse my ignorance. I was wondering is it really necessary to create a separate deferred income account when you could just do a transaction report on your IRA account to see how much distribution you had in a year or a month? -- JC On 1/15/24 5:33 PM, Michael or Penny Novack wrote: On 1/15/2024 4:02 PM, R Losey wrote: Thank you; this is helpful. I never really thought about recording Deferred Income previously because the investment people track it and let me know what has been taken out every year. But after the discussion in this list last year, I thought it might be good to track, at least the taxable withdrawals. I see that Deferred Income should have been recorded, but it wasn't. Instead of using "Opening Balance" when they were set up, the amount should have been more appropriately credited to Deferred Income, right? The fact that the government considers the TRANSFER of assets between two asset accounts (the IRA and checking) to be a taxable event even though no new money coming in can be considered as special case if "imputed income" and you COULD simply treat all imputed income situations the same. For example --- you might have as an employee benefit employer paid group term insurance and your employer might even offer options like 5 years salary. Now the US government considers up to $50,000 face value a non-taxable benefit but the premium for coverage above that amount as "imputed income". In other words, this will appear on your pay stub as part of your total taxable income even though you didn't actually receive that as money. Well in the big split where you enter your salary you could handle that little piece using equity for the other side. As I have already noted, NOT actually changing total equity to both debit and credit equity by the same amount (the credit side being an income account, but both income and expense accounts "really: of type equity and the net of all unclosed income and expense accounts appearing with equity as "retained gains (or losses)" Some of us had to deal with other "imputed income". Thus if we had a "split dollar" insurance benefit* the premium for that amount of term coverage would show as an "imputed income" amount. Michael D Novack * The employer buys a cash value type policy on your life, and pays the premium. You get the right to name the beneficiary and the option (if you leave) to either buy and keep the policy (pay the employer for those premiums) or have the policy surrendered and keep the difference (after several years the policy should be worth more than the sum of the premiums paid in). In other words, you have a favorable "adverse choice" situation <> ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All. ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Deferred Income << the general case is "imputed income"
On 1/15/2024 4:02 PM, R Losey wrote: Thank you; this is helpful. I never really thought about recording Deferred Income previously because the investment people track it and let me know what has been taken out every year. But after the discussion in this list last year, I thought it might be good to track, at least the taxable withdrawals. I see that Deferred Income should have been recorded, but it wasn't. Instead of using "Opening Balance" when they were set up, the amount should have been more appropriately credited to Deferred Income, right? The fact that the government considers the TRANSFER of assets between two asset accounts (the IRA and checking) to be a taxable event even though no new money coming in can be considered as special case if "imputed income" and you COULD simply treat all imputed income situations the same. For example --- you might have as an employee benefit employer paid group term insurance and your employer might even offer options like 5 years salary. Now the US government considers up to $50,000 face value a non-taxable benefit but the premium for coverage above that amount as "imputed income". In other words, this will appear on your pay stub as part of your total taxable income even though you didn't actually receive that as money. Well in the big split where you enter your salary you could handle that little piece using equity for the other side. As I have already noted, NOT actually changing total equity to both debit and credit equity by the same amount (the credit side being an income account, but both income and expense accounts "really: of type equity and the net of all unclosed income and expense accounts appearing with equity as "retained gains (or losses)" Some of us had to deal with other "imputed income". Thus if we had a "split dollar" insurance benefit* the premium for that amount of term coverage would show as an "imputed income" amount. Michael D Novack * The employer buys a cash value type policy on your life, and pays the premium. You get the right to name the beneficiary and the option (if you leave) to either buy and keep the policy (pay the employer for those premiums) or have the policy surrendered and keep the difference (after several years the policy should be worth more than the sum of the premiums paid in). In other words, you have a favorable "adverse choice" situation <> ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
