When you use after-tax money to purchase investments that typically deliver investment returns in the form of qualified dividends and long-term capital gains, you may pay fewer taxes over the long haul—these types of investment income are subject to a lower tax rate—and in some cases, long-term capital gains are not taxed at all.
These types of accounts can be savings accounts, brokerage accounts, or mutual fund accounts. Speak to your financial planner about the right way to structure your accounts. The original amount you invest is called your cost basis, or principal.
Partner Links. You can also have accounts that have a combination of pre-tax and after-tax dollars.
Yield Basis The yield basis is a method of quoting the price of a fixed-income security as a yield percentage, rather than as a dollar value. Login Advisor Login Newsletters. Indemnification under Section 16.
Tax-Exempt Sector The tax-exempt sector is a market niche comprised of investment vehicles exempt from federal taxes. The payment of amounts under this Section 2. Basis Price The basis price is the price of a security quoted in terms of its yield to maturity.
Personal Finance. When you cash in an after-tax non-retirement account investment, you only pay tax on any investment gain above your original investment amount.
Taxable bonds may state a higher yield than their tax-exempt cousins, but investors want to compare the return on investment of the two products accurately. All payments due in respect of Non-United States Taxes under this Article 8 shall be fully adjusted to reflect i any net increase in Taxes that the recipient of such payments will experience as a result of receiving such payments, ii any net increase in Taxes such recipient will experience as a result of receiving any gross-up payments under this Section 8.
After-tax basis refers to how one compares net yields on taxable and tax-exempt bonds. Interest is subject to both state and federal taxes.
Tax-Deferred Accounts. Sample 1 Sample 2 Sample 3. Sample 1 Sample 2 Sample 3 See all 8.