Question About Taxes - ESPP Plans

English
1

Hi,

I’m fairly new to PP. I’ve been slowly entering in my data for a couple months. And I work for a company in the U.S. where I have an ESPP Stock Purchase plan with a look-back provision. Basically depending on when I sell the shares of my ESPP, I’m taxed differently on the sale.

I’ve been trying to understand how taxes work in PP, and I’ve been struggling. So, I can’t apply the taxes right away when I sell the shares as they aren’t taxed right away. Instead I transfer the funds out to another account, and at the end of the year that’s when I pay taxes. How would I handle this in PP?

If I’m recording my taxes as a whole, I would think I would actually have to start recording all tax sources then to get the most accurate IRR. Meaning I’d have to enter paychecks and so forth. But I don’t fully understand all the math behind the statistics of PP, and what affects what. Any assistance would be appreciated.

2

Holy crap, I just found an old post on this forum that says taxes aren’t even included in IRR calculations. Is that true? The post was back in 2022. So maybe things have changed. If it is true, than this makes my question completely irrelevant. No point of dealing with the taxes from ESPP sales if taxes don’t affect IRR, since taxes don’t affect TTWROR too.

3

If I remember correctly, taxes are not taken into account for IRR/TWR calculation at security level, but are taken into account at portfolio level.

4

Oh…well if that’s true, then that’s fine I guess. Still leave me with questions about how to handle the taxes though. I did some mining of previous threads. I think if I want to take it into account as accurately as possible, I’d actually have to do things like entering paycheck information and all other accounts. Bleh.