Regular Asset Income
How do you calculate regular asset income?
My calculations show 4%. Where is this number coming from?
Thank you.
c.
Monte Carlo has been turned off for the above.
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Dear C.,
We calculate real (inflation adjusted) reqular asset income by mulitplying your regular assets by [(1+i)/(1+inf)]-1, where i stands for the nominal rate of return you set and inf stands for the inflation rate you set.
best, Larry
Larry,
Thanks for the response.
So, "Regular Asset Income" reflects the inflation adjusted growth of the portfolio value, not the expected dividend / interest / capgains realized by the portfolio.
Please confirm if my understanding is correct.
Thanks again.
c.
Hello,
How do you treat the "regular asset income" for tax purposes?
I'm curious to know if you treat it all as "realized gains" & tax based as capital gains, qualified dividends or plain int/earnings?
I assume, any consumption shortfall that is made up by sales from the regular portfolio are treated as a combination of realized gains & return of capital based on the entry in the assumptions page.
I am really getting an appreciation of the complexity involved here! Your program is as much an educational tool as a financial one.
Thank you.
c.
cpereira at comcast.net wrote:How do you treat the "regular asset income" for tax purposes?
"Regular Assets" are savings. Income from savings are tossed into your adjusted gross income and taxed at appropriate income tax rates.
cpereira at comcast.net wrote:I assume, any consumption shortfall that is made up by sales from the regular portfolio are treated as a combination of realized gains & return of capital based on the entry in the assumptions page.
Exactly.
cpereira at comcast.net wrote:I am really getting an appreciation of the complexity involved here! Your program is as much an educational tool as a financial one.
Thanks for the complement.
Best,
Dick Munroe
munroe wrote:cpereira at comcast.net wrote:How do you treat the "regular asset income" for tax purposes?
"Regular Assets" are savings. Income from savings are tossed into your adjusted gross income and taxed at appropriate income tax rates.
cpereira at comcast.net wrote:I assume, any consumption shortfall that is made up by sales from the regular portfolio are treated as a combination of realized gains & return of capital based on the entry in the assumptions page.
Exactly.
cpereira at comcast.net wrote:I am really getting an appreciation of the complexity involved here! Your program is as much an educational tool as a financial one.
Thanks for the complement.
So if I have a taxable account with yearly gains does the program automatically assume I will pay taxes on the gains or will it wait until I withdraw them and then tax them at the LTCG rate since I am not a day trader and all of my account is in mutual funds that are over one year old?
Best,
Dick Munroe