Investment Account Manager Forum

General Category => Transactions => Topic started by: ksakers on November 05, 2017, 10:10:10 AM

Title: correction of 401(k) over-witholding
Post by: ksakers on November 05, 2017, 10:10:10 AM
My 401(k) provider exceeded the cap on my annual contributions.  To correct this, they issued a “negative adjustment” for the amount of the overage.  However, the number of shares removed is at a share price that is different than the price at which the shares were originally purchased.  Therefore, I cannot just modify the original transaction for a purchase of fewer shares, because it will result in a different number of total shares than what is actually in the account, producing a tracking error.  I think that a separate, additional transaction is needed, similar to a sale, but non-taxable.  A Return of Capital does not seem to adjust the share count.

Is this the right approach?  If so, what type of transaction can I use to deduct shares from the account at a specified price, like a sale but non-taxable?
Title: Re: correction of 401(k) over-witholding
Post by: Matt Willms on November 09, 2017, 09:10:05 AM
We don't have any such transaction entry...but you can use the sale activity since this is in a non taxable 401k, so the gains/losses are not relevant.  Or, perhaps more easily, you could simply delete the original activity, and re-enter correctly.

If you have add'l questions, please let us know.

Matt