Updated almost 6 years ago on . Most recent reply

Do you include or exclude taxes?
Hey there,
When forecasting a return for a corporate investment structure, do you subtract state and federal taxes from your ROI calculations?
*** I ask as it doesn't seem that the BP deal calculators factor in state and federal taxes. It only seems to account for municipal which reduces net income before the feds come for their share. ***
For example, if my R/E investments generate $100,000 in net income (held in a corporation) and these profits will be distributed to investors, do you subtract state and federal taxes to find the ROI and IRR?
Corporation net income:$100,000
State/Federal taxes (20%): $20,000
True Net Income: $80,000
What calculations do you use?
Most Popular Reply

Pretax After tax are both used depends on preference.. normally it pre taxed you used especially to determine value
You will not use an after-tax NOI with a market cap rate to determine value of a property
I would think an after tax number would be used internally to see how much cash will actually be in the bank that can be utilized