By Financial Advisor Peter Egolf
Investors, and the financial industry, love to focus on gross investment returns. But the hoopla around returns can obfuscate the truth: investment returns are net of the taxes created by those returns.
Each investor has a unique consequence, a bill incurred through their yearly income tax returns - months after the investment transaction occurred. The delay in time between the transaction and the tax bill, not to mention the individual specificity of taxes, creates a disconnect between investment performance and the associated tax costs.
Investments generate taxes in three core areas: within investment funds, during investment transactions, and through the type of investment account.
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