### Detailed view - taxes on portfolio growth seem wrong

Posted:

**Mon Jun 08, 2020 11:27 pm**Great program, but I think I may have found an editing bug in the "Taxes on portfolio growth" column of detailed view. I'm running version 4.03.02.

Assume a 100,000k taxable portfolio (0 for the other 2). 0% interest, 20% investment and income tax rates. In additional inputs set 10% rate of return from start of plan to end of plan with no standard deviation. Set annual retirement spending to 20000.

What I get the in taxes on portfolio growth the first year is $1728. That appears to be calculated based on the subsequent year (and done either incorrectly or in a manner I do not understand). Using the value of $86400 (calculated below). The taxes on that balance's growth would be 86400*0.1*.2 = $1728. SO I think I understand how it was calculated, but:

The taxable portfolio value in the first year (86400) is correct. it is calculated as $100,000 - 20,000 expenses = 80000. Then there is growth of 10% so $88000. Then taxes are calculated as 8000*0.20 = *1860. Final balance is $100000 - 20000 + 8000 - 1860 = $86400, which is right.

I sure expect that the taxes on portfolio growth in that year should thus be reported as $1860. But possibly it would show up in the following year (deferred?). Regardless, that $1860 value never shows up in the taxes on portfolio growth column, so I'm quite confused.

But it is an extra column, and doesn't seem to impact the real ones that matter...

Attachment has the very simple frp file I was playing with.

Thoughts?

Thanks much.

Assume a 100,000k taxable portfolio (0 for the other 2). 0% interest, 20% investment and income tax rates. In additional inputs set 10% rate of return from start of plan to end of plan with no standard deviation. Set annual retirement spending to 20000.

What I get the in taxes on portfolio growth the first year is $1728. That appears to be calculated based on the subsequent year (and done either incorrectly or in a manner I do not understand). Using the value of $86400 (calculated below). The taxes on that balance's growth would be 86400*0.1*.2 = $1728. SO I think I understand how it was calculated, but:

The taxable portfolio value in the first year (86400) is correct. it is calculated as $100,000 - 20,000 expenses = 80000. Then there is growth of 10% so $88000. Then taxes are calculated as 8000*0.20 = *1860. Final balance is $100000 - 20000 + 8000 - 1860 = $86400, which is right.

I sure expect that the taxes on portfolio growth in that year should thus be reported as $1860. But possibly it would show up in the following year (deferred?). Regardless, that $1860 value never shows up in the taxes on portfolio growth column, so I'm quite confused.

But it is an extra column, and doesn't seem to impact the real ones that matter...

Attachment has the very simple frp file I was playing with.

Thoughts?

Thanks much.