Taxes against contribution or drawdown against tax related cashflow types
Posted: Sun Sep 01, 2019 2:40 am
Hi Jimr,
In the instance where we enter a number (positive or negative) against a cashflow type (such as taxable savings or tax-deferred savings) where positive is a contribution and negative is a drawdown or withdrawal, does FRP assess tax against that transaction?
I'm trying to model a situation where I would take an advance draw against a tax-related account. For instance, I'd like to harvest 3 years of my annual expenses against taxable savings account or tax-deferred account that is growing at a certain percentage and also modeling the tax impact of this situation. For instance, if my annual expenses are $20K/year, I want to harvest let's say 75K against my taxable account and let's say my investment tax is 15%, then after taxes it's about $63K - which is roughly 3 years worth of my expenses. And then I want to do this again every 3 years until some endpoint. I'm currently assuming that the contributions negative or positive are not automatically assessed the tax - therefore, I'm modeling this as a combo contribution of negative $75K against the taxable account and a contribution of $63K against the taxable account.
Am I correct in approaching it this way?
Thank you.
In the instance where we enter a number (positive or negative) against a cashflow type (such as taxable savings or tax-deferred savings) where positive is a contribution and negative is a drawdown or withdrawal, does FRP assess tax against that transaction?
I'm trying to model a situation where I would take an advance draw against a tax-related account. For instance, I'd like to harvest 3 years of my annual expenses against taxable savings account or tax-deferred account that is growing at a certain percentage and also modeling the tax impact of this situation. For instance, if my annual expenses are $20K/year, I want to harvest let's say 75K against my taxable account and let's say my investment tax is 15%, then after taxes it's about $63K - which is roughly 3 years worth of my expenses. And then I want to do this again every 3 years until some endpoint. I'm currently assuming that the contributions negative or positive are not automatically assessed the tax - therefore, I'm modeling this as a combo contribution of negative $75K against the taxable account and a contribution of $63K against the taxable account.
Am I correct in approaching it this way?
Thank you.