Capital gains taxes in Advizr are calculated using Turnover Ratio and Long Term Capital Gains Ratio
- Turnover Ratio: percent of an account that is realized and taxed annually.
- Long Term Capital Gains Ratio: percent of the portfolio taxed at long term capital gains rates rather than ordinary income.
- To illustrate these concepts, an account worth $1,000,000 with a 5% turnover ratio and a 25% capital gains ratio would be taxed as follows: ($1,000,000 * 5%) = $50,000 of capital gains of which 25% would be taxed at long term capital gains rates and the rest at the client's ordinary income rate.
- Capital gains taxes are displayed on the balance sheet.
- Tip: If you want an account to be taxed at only long term capital gains rates, after you set your Turnover Ratio, set the Capital Gains Ratio to 100%.