It's not a taxable account. So the whole tax thing was not even something I would have thought about.It is reasonable to keep two sets of books. One is the investment performance measured by gain, specifically CAGR, and/or by the return, specifically CAGR under the condition all distributions are reinvested.* The other is the tax liability measured by the unrealized gain (not the same gain as just mentioned), which is the difference between the current value and the cost basis. Those are two completely different things. The first is relevant to what your investment has done for you and the second determines how much taxable income you might realize if you sell everything today. Your broker is correct in pointing out what your running tax liability is, especially if there might be an opportunity for tax loss harvesting. It is possible Schwab did not even think there was any confusion here. They probably would post investment return in a personal return report.
*If the distributions are not reinvested one cannot compute ordinary return but can compute internal rate of return or time weighted average return. Most likely a report of personal return would be IRR, which also works for all distributions being reinvested.
Yes I understand all this now. Everyone can go back to their regularly scheduled programming.
Statistics: Posted by hittheroad — Tue Feb 27, 2024 4:32 pm — Replies 88 — Views 11385