On 12/18/2022 10:20 PM, Fred Tydeman wrote:
For a USA person, when I move cash from a regular IRA (tax deferred account) to a Roth IRA (tax free account), besides the movement of the cash, I need to also somehow show that the cash moved is considered income. What should be the other side of the income pair?
This is just one example (a special case, though a biggie in terms of amount) of the more general question of "imputed income". In other words, where the IRS considers that you have received income but no actual money coming in.
I will give a different example that probably affects more people (although usually by a small dollar amount) to show how IT might be handled. It won't be of use to Fred, except does point out that an accounting question, not a gnucash question.
Employers are allowed to pay the premiums of group term insurance for employees (it is a commonly offered benefit) and they usually offer one year's salary (the employees might have the option of more years, but THEY pay that portion of the premium, payroll deduction). However the IRS considers just the premium for the first $50,000 of coverage to be a tax free benefit. So if the employee's salary is $60,000 and they opt for three year's salary ($180,000) they pay the premium on $120,000 of that by payroll deduction, the company pays the premium on $60,000 (the benefit) and the IRS considers that the employee has "imputed income" in the amount of the premium on $10,000 of the coverage.
What's the other side of the transaction? I'd make that "insurance expense" (same place that the payroll deduction for the extra years went)
Fred, you need professional accounting advice on this. It's not a gnucash question in the sense you;d have exactly the same question were you keeping your books the old fashioned way, pen and ink on paper.
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.
