I have an investment in stocks account with a return of 6.5% and a tax rate of 10%.
When I place this account in the "Cash Infusions" I get a different result than when I place it in the "Investments". Why is this? What is the correct way to simulate this investment?
When you list the investment as Taxable, the taxes are netted out of the return on an annual basis similar to a savings account. This will overstate the taxes if you buy and hold for a number of years but we would rather overstate than understate taxes.
When you list it as a Cash Infusion (which we don’t recommend), I am guessing you injected the amount in the future?
If so it is only taxed the year you inject it and only if you also added the tax rate to the Cash Infusion line.