Hi Adam,
If I'm following you correctly, the approach described in the early
thread should work. Any withholding can be included in the transaction.
See: https://lists.gnucash.org/pipermail/gnucash-user/2026-June/120857.html
Regards,
Sherlock
On 6/11/26 1:01 AM, Adam H. Kerman wrote:
Since this came up in the other thread, I've got an accounting question with
regard to treatment of retirement funds.
For tax purposes, retirement funds that receive pre-tax contributions are
treated like tax-exempt entities, a separate taxpayer from the beneficiary,
so that interest and realized capital gains are tax exempt. There are
literally 990s to file, although the funds manager files them and not the
beneficiary (unless self-directed).
If I set up books in gnucash according to tax law, if I'm accounting for an
IRA, when RMD is known, I enter it as a liability which gets reduced with
each distribution. I have to show both the asset transfer between the IRA
account and checking account AND ordinary income from the distribution. If
there is witholding from the distribution, then that reduces the tax
liability and is not shown as an asset transfer.
Here's a situation I just encountered. Say the borrower is trying to qualify
for a loan. Qualification rules require showing an adequate amount of
income, regardless of assets.
If the borrower has pre-tax retirement funds, for accounting purposes, can
can distributions be considered ordinary income, like tax law compliance?
If not, then the only income from the fund are interest within the fund
regardless of distribution.
Is there are argument to be made that the accounting rule is the same as the
rule for tax law compliance?
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