Microsoft KB Archive/130467

Money: How to Track Tax-Exempt Dividends

PSS ID Number: Q130467 Article last modified on 12-12-1997

3.0 3.0a 4.0 4.0a 5.0

WINDOWS

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= SUMMARY =

If you have stocks or mutual funds invested in an IRA or a 401(k) retirement plan, you may want to track dividends as tax exempt dividends for tax reporting purposes. This must be done manually in an associated Cash Account.

= MORE INFORMATION =

In the Investment Account, when you choose Dividend as your investment activity, Money internally categorizes this as Investment Income/Dividend Income.

When you choose Reinvest Dividend as your investment activity, Money internally records this as two transactions; a Dividend transaction and a Buy transaction. Because Money does this internally, you can not designate the Dividend as a tax-exempt activity. Performing these tasks manually allows you to designate the correct subcategory

To track a dividend as tax-exempt, manually enter the dividend in an associated Cash Account. If the dividend was reinvested, use the following steps to enter Buy transactions.

  To track these dividends, you must create an investment income subcategory called Tax-Exempt Dividend. Money 5.0, 4.0:   Go To the Payees & Categories window.   Click Categories.   Select the Investment Income category, and click New.   Select Subcategory of Investment Income and enter the following name: Tax-Exempt Dividend   Click Next, and answer Yes to the question of whether it is tax related.   If you plan to export tax information to tax preparation software, assign this subcategory to the proper tax form.   Click Go To Details. </li>  On the Tax Form list, click Schedule B. </li>  On the Form Line pulldown list, click Div Inc., Non-taxable. </li></ol> </li></ol>

Money 3.x: <ol style="list-style-type: lower-alpha;">  On the List menu, click Category List. </li>  On the Category List, click Investment Income. </li>  On the Investment Income subcategory list, click New. </li>  In the Name box, type the following and click OK: Tax-Exempt Dividend </li>  Select Include On Tax Reports. </li>  If you plan to export tax information to tax preparation software, assign this subcategory to the proper tax form. <ol style="list-style-type: decimal;">  On the Tax Form list, click Schedule B. </li>  On the Tax Form Line pulldown list, click Div Inc., Non- taxable. </li></ol> </li>  Click Close. </li></ol> </li>  To track Dividend Income for Tax Exempt Investments categories, use an associated Cash Account. If your investment account does not have an associated Cash Account, you can modify your investment account to include one. Money 5.0, 4.0: <ol style="list-style-type: lower-alpha;">  In Account Manager, select the account you use to track your tax deferred investments. </li>  Click Account Detail, and click Modify. </li>  Select Cash Account Enabled and click OK. </li>  Leave the Opening Balance empty and click OK. </li></ol>

Money 3.0: <ol style="list-style-type: lower-alpha;"> <li> On the List menu, click Investment Account List. </li> <li> Select the account you use to track your tax deferred investments. </li> <li> Click Modify. </li> <li> Select Cash Account Enabled and click OK. </li> <li> Leave the Opening Balance empty and click OK. </li> <li> Click Close. </li></ol> </li> <li> Use the following steps for your version of Money: Money 5.0, 4.0: Go To the Account Register and select the associated Cash Account for the Investment account. Money 3.0: In the Investment Details window, click the Cash Account button for your tax deferred account. </li> <li> Record the dividend paid on your tax-exempt investment as a transaction in the Cash Account using the following steps: <ol style="list-style-type: lower-alpha;"> <li> In the Date field, type the date the dividend was paid. </li> <li> In the Payee field, type “dividend” (without the quotation marks) and your investment’s name. </li> <li> In the Deposit field, type the amount of the dividend. </li> <li> In the Category field, type “Investment Income” (without the quotation marks). </li> <li> In the Subcategory field, type “Tax-Exempt Dividend” (without the quotation marks). </li> <li> Press ENTER to record the transaction. </li></ol> </li> <li> If the dividend was reinvested, record the Buy transaction in the Cash Account using the following steps: <ol style="list-style-type: lower-alpha;"> <li> In the Date field, type the date of the reinvestment. </li> <li> In the Payee field, type “Reinvest Dividend” (without the quotation marks). </li> <li> In the Payment field, type the amount of the dividend. </li> <li> In the Category field, type “Buy Investment” (without the quotation marks). </li> <li> In the Buy Investment dialog box, complete the information for the purchase of the investment. </li> <li> Click OK. </li></ol> </li></ol>

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Additional query words: kbhowto w_money 3.00 3.00 401k 401K 4.00 money95 Rollerbob money_95 95_money

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