How does the program assign or calculate the portion of the annual return that is due to dividends, capital gains, and interest?
The program estimates the share of the annual return that is due to dividends, capital gains, and interest using the asset classes of each holding. For example, if you have a fund that is 60% in growth stocks and 40% in medium term bonds, the program maps the share of the return that is due to dividends, capital gains, and interest as seen in the screenshot below. In this example, growth stocks will have an annual return of 6.6%. The share of the return each year due to dividends is 20%, and the share of the return that is interest is 0%. This means the remaining portion (80%) is due to capital gains. Capital gains taxes on taxable investments are only realized when an investment or part of an investment is sold. The amount of capital gains taxes will also depend on the cost basis of the investment.