Tax-Efficient Investing Math: After-Tax Returns, Asset Location & Loss Harvesting

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Split four assets' returns into income and price growth, tax each part at its own illustrative rate and see which asset really keeps the most.
• Grow the same 50,000 for 30 years once with tax taken every year and once with the tax deferred to the end, chart both paths and turn the gap into an annual return.
• Follow the same 10,000 of pre-tax earnings through a taxable, a tax-deferred and a tax-free account and find when deferral beats paying tax today.
• Score three funds by how much a tax-free account adds to $1 over 20 years, rank them and measure what the right location is worth on 150,000.
• Find the losses in a five-fund portfolio, offset them against this year's gains, use part of the rest against other income and carry the remainder forward, then price the tax saved.
• Sell 300 shares out of four purchase lots twice, first in, first out and highest cost first, and measure the tax difference.
• Fund 10 years of retirement spending from a taxable and a tax-deferred account in two orders and compare the after-tax wealth that is left.
• Compare a 2.50 dividend with a buyback of the same size, where you sell shares to get the same cash, and see why the buyback leaves you more after tax.