After-Tax Return

The return on an investment including all income received and capital gains, calculated by taking expected or paid income taxes into account. Generally reserved for returns on positions that have been closed out or sold, after-tax returns are also used to evaluate the after-tax yields of municipal versus corporate and government bonds because municipals are free from federal income taxes.


After-tax returns serve to level the playing field, breaking down performance data into “real life” form for the individual investor. Investors in the highest tax brackets will often look to investments, such as municipals and high-yielding stocks (dividends are taxed at a lower rate than capital gains) to aid in boosting after-tax returns. People who trade stocks frequently are subject to the highest tax rates on capital gains, and after-tax returns will suffer unless the investor makes very profitable trades.



Investment dictionary. . 2012.

Look at other dictionaries:

  • After-Tax Return On Assets — A profitability measure that indicates how well a company uses its capital resources to generate income. To calculate after tax return on assets, divide the company s total after tax income by the value of its total assets. The resulting figure,… …   Investment dictionary

  • After-Tax Return On Sales — A profitability measure that indicates how well a company uses its sales revenue. To calculate after tax return on sales, divide the company s after tax net income by its total sales revenue. The resulting figure, multiplied by 100, will be a… …   Investment dictionary

  • After-Tax Real Rate Of Return — The actual financial benefit of an investment after accounting for inflation and taxes. The after tax real rate of return is an accurate measure of investment earnings and usually differs significantly from an investment s nominal rate of return …   Investment dictionary

  • tax return — The form on which an individual, corporation or other entity reports income, deductions, and exemptions and calculates their tax liability. A tax return is generally for a one year period, however, in some cases, the period may be less than a… …   Black's law dictionary

  • Tax return (Canada) — Normally, Canadian Individual tax returns for any specific year must be filedby April 30 of the following year. There is no provision for generally extending this deadline, but there are a few exceptions.*Tax returns for self employed individuals …   Wikipedia

  • Tax return (United Kingdom) — In the United Kingdom the term tax return is used to refer to the document which must be filed with the HM Revenue Customs declaring liability for taxation. Different bodies must file different returns with respect to various forms of taxation.… …   Wikipedia

  • After-Tax Basis — The basis for weighing the performance of two investments against each other after taxes have been factored into the equation. After tax basis calculations are often used to compare yields between taxable bonds, such as corporate securities, and… …   Investment dictionary

  • After-tax real rate of return — Money after tax rate of return minus the inflation rate. The New York Times Financial Glossary …   Financial and business terms

  • after-tax real rate of return — The after tax rate of return minus the inflation rate. Bloomberg Financial Dictionary …   Financial and business terms

  • after-tax — adj. After tax is used with these nouns: ↑earnings, ↑income, ↑profit, ↑return …   Collocations dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.