After-Tax Return

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After-Tax Return

The return on an investment after any applicable taxes on it are paid. For example, if one sells a house for $100,000 but owes $25,000 in taxes from the sale, the after-tax return on the house is only $75,000. The amount of the after-tax return may vary on the same investment depending on whether one owes income tax or capital gains tax. It should not be confused with the after-tax value, which is similar but is not contingent on the sale of an asset or the closing of an investment.
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One constant concern of financial planners is how to maximize not just investment returns, but also after-tax returns. Sid Kess provides a guide to retirement accounts with advice on when and how to use each for the most tax-efficient investment approach.
The platform will help advisors minimize their clients' taxes and maximize their after-tax returns. The integration uses the Tamarac open API to integrate Tamarac information into LifeYield's software, which provides financial analytics for tax efficiency.
Individual tax reductions therefore increase savers' after-tax returns while business tax reductions lower the cost of capital.
Pre-tax and after-tax returns on average equity were 29pc and 18.7pc respectively.
"It's after-tax returns that make the difference," said Pape.
He also said the link between taxes and output in the economy, according to Joint Committee on Taxation, can directly influence the level of labor supply, physical capital, human capital, and technology in an economy by changing the after-tax returns to certain economic activities or changing the cost of pursuing them.
Pre-tax and after-tax returns on equity reach at 22.6 percent and 14.8 percent respectively; whereas pre-tax and after tax return on assets are at 1.5 percent and 1 percent respectively.
Based on the average annualized difference of after-tax returns, this cost would have been recovered by the performance differential in the first year.
The study finds that tax-efficient funds have tended to outperform other funds with respect to both before-tax and after-tax returns.
Taxation is a dry, yet critical, topic for any investor who seeks maximum risk-adjusted and net after-tax returns in the low-return investment environment that many of us--including the IMF and World Bank--anticipate in the future.
This article examines opportunities for gold investors to substantially increase their after-tax returns via an IRA.
Normal after-tax returns have averaged approximately 1 percent of transaction reserves.