Browse the scenarios used to verify financial calculations, tax rules, and portfolio analysis behavior.
288 scenarios across 13 categories
26 scenarios
A lot acquired on Feb 29 starts its holding period on Mar 1 of the acquisition year. Twelve months elapse at the end of Feb 28 of the following year, so Mar 1 is the first long-term sale date.
A sale larger than the first lot should fully consume that lot and partially consume the next lot in deterministic order.
When you're in the gains zone, optimized lot selection sells long-term gains first because LT rates beat ST rates.
A lot acquired on Feb 29, 2024 starts its holding period on Mar 1, 2024 (the day after acquisition). Twelve months elapse at the end of Feb 28, 2025, so Mar 1, 2025 is the first long-term sale date.
Optimized lot selection should consume short-term losses first, then long-term losses, then long-term gains, and finally short-term gains.
Within the same tax bucket, optimized lot selection should choose the lot with the greatest tax benefit first.
When two lots share the same acquisition date, FIFO should sell the lot that was inserted first. This keeps same-day ordering deterministic instead of arbitrary.
When two lots share the same acquisition date, LIFO should sell the most recently inserted lot first. This preserves deterministic tie-breaking for same-day positions.
A same-security stock split should not create a taxable event. It increases share count and lowers per-share basis while preserving each lot's total basis.
A nontaxable stock spin-off should allocate each parent lot's basis between parent and child shares using their relative fair-market values on the distribution date.
A qualifying stock-for-stock merger with no cash boot should not recognize gain or loss. The successor stock keeps the source lot's aggregate basis and holding period.
In an otherwise nontaxable stock-for-stock merger, cash boot can trigger recognized gain up to the cash received. The successor stock keeps carryover basis adjusted for recognized gain and cash received.
When a purchased call is exercised, the premium paid is added to the strike price and becomes part of the acquired stock basis.
Publication 550 says property acquired by exercising an option starts its holding period after exercise. A long-held call should not carry its option-open date into the acquired stock lot.
When a written put is assigned, the premium received reduces the basis of the stock acquired through assignment.
Publication 550 says a writer whose put is exercised starts the acquired stock holding period on the date the stock is bought, not the date the put was written.
When a written call is assigned, the option premium is added to the stock-sale amount realized for gain or loss.
When a purchased put is exercised, the premium paid reduces the amount realized on the sale of the underlying shares.
Publication 550 generally treats buying a put as a short sale. If the underlying stock was still short-term when the put was bought, gain on exercising the put should be short-term even when the stock sale occurs more than one year after the stock was acquired.
Publication 550 applies the same short-sale character rule when the taxpayer buys the underlying stock after buying the put but before exercise. Positive gain on exercising that put should be short-term even when the later stock sale is more than one year after the stock was acquired.
When a purchased listed option expires worthless, the premium paid becomes a capital loss and the term follows the option holding period.
When a non-dealer written listed option expires unexercised, the deferred premium is recognized as short-term capital gain.
A purchased option sold in a closing transaction recognizes gain equal to closing premium received minus the premium paid.
A non-dealer writer who closes a listed option by buying it back recognizes short-term capital gain or loss equal to the premium received minus the closing premium paid.
HIFO picks the highest cost basis lot regardless of whether it's LT or ST. This can be suboptimal compared to the optimized method.
FIFO sells the oldest lot first (LT gain), LIFO sells the newest first (ST gain). Same lots, different tax outcomes.
13 scenarios
A prior-year short-term carryforward should apply before current-year short-term gains are taxed.
Short-term carryforward should offset short-term gains first and long-term carryforward should offset long-term gains first.
When short-term and long-term carryforwards match current-year gains exactly, there should be no taxable gains and no residual carryforward.
If carryforwards exceed current-year gains in both buckets, the result should be a net loss that is capped at the ordinary-income deduction limit.
A large short-term carryforward can turn a small short-term gain into a loss that then cross-nets against long-term gains.
A prior-year loss carryforward must absorb current-year gains before any ordinary-income deduction is computed.
Cross-character netting should let a short-term capital loss reduce a long-term capital gain before any remaining gains are taxed.
With a net capital loss and no gains, only $3,000 can reduce ordinary income for a Single filer. The rest must carry forward.
Married Filing Separately gets only a $1,500 ordinary-income offset from net capital losses rather than the standard $3,000.
A wash-sale-disallowed loss should be excluded from capital-gain netting. The public scenario makes that interaction explicit instead of hiding it behind internal ledger rules.
A short-term loss that exceeds the annual deduction cap should carry forward into later years. This scenario shows both the immediate deduction cap and the remaining carryforward one year later.
A multi-year carryforward is not just a single rollover. It can shrink against gains, generate a smaller ordinary deduction in a no-trade year, and then fully disappear before later gains arrive.
$20k loss in Y1 → $3k offset + $17k CF. Then $5k gain in Y2 is absorbed by carryforward, with $9k remaining.
12 scenarios
The IRS wash-sale window is inclusive. Buying back exactly 30 days after a loss sale should still disallow the loss.
The backward side of the wash-sale window is also inclusive. Replacement shares bought exactly 30 days before the loss sale should still disallow the loss.
A December loss followed by a January repurchase should still defer the loss and carry the original acquisition date into the replacement lot.
If you sell 100 shares at a loss and repurchase only 60, only 60 shares of loss are deferred and the remaining 40-share loss stays deductible.
A taxable-account loss followed by a substantially identical IRA or Roth IRA purchase within the wash-sale window disallows the loss, but the IRA lot does not receive a basis adjustment.
The wash-sale window works backward too. Replacement shares bought before the loss sale can still defer the loss into basis and tack the holding period.
A repurchase within 30 days should mark the loss as a wash sale, defer the loss, and increase the replacement basis.
When a wash sale occurs, the replacement lot should tack the original acquisition date so later tax character remains correct.
A replacement trade just outside the 30-day window should leave the loss deductible and avoid any basis adjustment.
If the loss asset and the replacement asset map to the same substantially-identical group, the loss should still be disallowed.
Replacing SPY with QQQ should not trigger wash-sale treatment when the two assets sit in different identity groups.
A wash-sale disallowed loss doesn't reduce your gains in the capital gains netting calculation.
8 scenarios
On a rebalance day, the backtest engine should apply daily returns first, then the cashflow, and only then evaluate the rebalance.
If cashflow arrives on the weekly rebalance day, the contribution should be included in the value that gets rebalanced.
With daily rebalancing, the portfolio should follow the weighted-average return of the sleeves each day. This is the core arithmetic that many higher-level backtests depend on.
Offsets are part of the financial model, not UI sugar. A weekly rebalance with a two-day offset should fire deterministically earlier than the period-end schedule.
A one-time cashflow scheduled on a non-trading day should snap to the next trading day instead of disappearing or executing early.
Periodic cashflows can have explicit start and end dates. This scenario shows that the engine respects those bounds instead of applying the cashflow across the entire backtest.
Deviation mode should be able to fire even when periodic rebalancing is disabled. This is an important distinction from time-based schedules.
The `either` mode is not just shorthand for two separate trigger types. When both conditions fire on the same day, the event should preserve that combined reason explicitly.
7 scenarios
A simple under-one-year round trip should show a short-term gain and zero wash-sale adjustment in broker-style reporting.
A 100-share loss sale followed by only a 40-share replacement should leave a partially deductible loss and a partial wash adjustment.
Holding period classification should move a realized gain into the long-term broker 1099 bucket once the position has been held more than a year.
A fully matched replacement inside the window should move the current-year reported loss to zero and push the entire loss into the wash-sale adjustment column.
A late-December loss sale and early-January replacement should still create a sale-year wash adjustment because the 30-day window crosses tax years.
When one sale consumes both an old lot and a newly acquired lot, broker-style annual reporting should split the realized gains by tax character.
Multiple short-term sales in the same year should aggregate to the correct annual broker-style short-term totals.
17 scenarios
The shared federal tax schedule should expose the 2026 married-filing-jointly ordinary brackets, standard deduction, long-term capital-gain thresholds, and NIIT threshold from the IRS inflation-adjustment source.
ISO spread is an AMT preference item while NSO spread is ordinary wage income. A mixed-grant example makes that split visible in one run.
$195k wages + $10k NSO spread = $205k -> exceeds the $200k single-filer Additional Medicare Tax threshold -> 0.9% x $5k = $45.
Itemizing can lower regular taxable income while still increasing AMTI because SALT deductions are disallowed for AMT. This scenario exposes that difference explicitly.
A high-income 2026 itemizer should have itemized deductions reduced under IRS Publication 505 Worksheet 2-6 before regular tax and AMT are computed.
A single filer with $205,000 of Medicare wages in 2026 owes the 0.9% Additional Medicare Tax on the $5,000 above the $200,000 threshold.
A married-filing-separately taxpayer with $130,000 of Medicare wages in 2026 owes the 0.9% Additional Medicare Tax on the $5,000 above the $125,000 MFS threshold.
A single filer with $130,000 of Medicare wages and $145,000 of net self-employment profit has Schedule SE net earnings of $133,907.50. The wages reduce the Additional Medicare self-employment threshold to $70,000, leaving $63,907.50 subject to the 0.9% tax.
For a married couple filing jointly, $190,000 of Medicare wages and $150,000 of RRTA compensation do not create Additional Medicare Tax because the wage and RRTA buckets are each below the $250,000 threshold and are not combined for this comparison.
A single filer with $100,000 of net self-employment profit and explicit eligible QBI receives the simplified Section 199A deduction, capped by 20% of taxable income before QBI after the standard deduction.
Starting in 2026, an applicable taxpayer with at least $1,000 of active qualified business income receives at least a $400 Section 199A deduction when the ordinary 20% computation would be lower.
A qualified business net loss carryforward from a prior year offsets current-year qualified business income before the Section 199A business component is computed.
A single filer above the 2026 Section 199A phase-in range with a non-SSTB trade or business must limit the business QBI component to the greater W-2 wage or wage-plus-UBIA limit.
A single filer midway through the 2026 Section 199A phase-in range with a non-SSTB trade or business applies half of the W-2 wage/property excess reduction.
A single filer above the 2026 Section 199A phase-in range cannot treat SSTB income, W-2 wages, or UBIA as qualified for the business QBI component.
$90k ISO spread + $150k wages. The ISO spread is an AMT preference item (not regular income) → AMT exceeds regular tax.
A modest ISO spread does not always generate AMT. If AMTI stays near the exemption amount, AMT owed can remain zero.
173 scenarios
The federal schedule verifier should expose the §63(f) add-on separately from the base standard deduction so retirement and tax-planning tools can model each checked age or blindness box without hiding it inside a flat deduction.
Historical tax schedules should expose the per-box age-65+ and blindness standard-deduction additions, not reuse only current-year values or omit the middle years.
Short-term gains count in both MAGI and net investment income. A taxpayer near the NIIT threshold can see a materially higher NIIT bill when short-term gains are added on top of long-term gains.
The IRS states that the Net Investment Income Tax took effect on January 1, 2013 and does not affect 2012 taxable-year returns filed in 2013. A 2012 verification run with high investment income should therefore produce zero NIIT.
The IRS states that the Net Investment Income Tax applies beginning with tax years that start on or after January 1, 2013. A 2013 single-filer verification run with $100,000 of net investment income and MAGI above the $200,000 threshold should owe $3,800 of NIIT.
Form 8960 instructions define NIIT modified adjusted gross income by increasing AGI for the foreign earned income exclusion adjustment. A single filer below the NIIT threshold before that addback can still owe NIIT when excluded foreign earned income pushes MAGI above $200,000.
$30k qualified dividends with no wages can remain in the 0% LTCG/qualified-dividend bracket for Single filers.
A single filer with $20,000 of Social Security benefits and $35,000 of other income has $45,000 of provisional income. Pub. 915 puts that above the $34,000 adjusted base amount, making $13,850 of benefits taxable.
Publication 915 groups head-of-household filers with single and qualifying surviving spouse filers for Social Security taxability. With $20,000 of benefits and $20,000 of other income, provisional income is $30,000 and only $2,500 of benefits are taxable.
Publication 915 directs married-filing-separately taxpayers who lived with their spouse at any time during the tax year to skip the threshold worksheet and include 85% of benefits.
Publication 915 lets married-filing-separately taxpayers who lived apart from their spouse for the full year use the same $25,000 base and $34,000 adjusted base workflow as single filers.
When an eligible survivor has their own Social Security benefit and an attributed survivor benefit from a deceased spouse, SSA rules do not add the payments together. The planning engine should use the higher annual benefit after the year of death.
SSA guidance says children generally receive 75% of the parent's benefit, subject to family maximum limits. The planning engine's partial survivor-benefit knob should scale the attributed survivor benefit and still avoid adding it to the survivor's own benefit.
SSA survivor benefits are payable only to eligible spouses, ex-spouses, children, and dependent parents. The planning engine should not infer survivor eligibility from household membership; if the living member is not marked eligible, their own Social Security benefit remains the only year-after-death benefit.
When multiple eligible living members are modeled, the compact planning engine attributes a single survivor benefit to the lowest-own-benefit eligible survivor that the survivor benefit would improve. Higher-own eligible survivors keep their own benefit, and the household does not stack multiple survivor benefits.
For 2022, SSA sets the OASDI contribution and benefit base at $147,000. Employee Social Security tax applies at 6.2% only up to that base, while Medicare tax applies to all FICA wages.
For 2023, SSA sets the OASDI contribution and benefit base at $160,200. Employee Social Security tax applies at 6.2% only up to that base, while Medicare tax applies to all FICA wages.
For 2024, SSA sets the OASDI contribution and benefit base at $168,600. Employee Social Security tax applies at 6.2% only up to that base, while Medicare tax applies to all FICA wages.
For 2025, SSA sets the OASDI contribution and benefit base at $176,100. Employee Social Security tax applies at 6.2% only up to that base, while Medicare tax applies to all FICA wages.
For 2026, SSA sets the OASDI contribution and benefit base at $184,500. Employee Social Security tax applies at 6.2% only up to that base, while Medicare tax applies to all FICA wages.
A flat-tax state is a useful contrast to progressive schedules. Illinois should simply apply its flat rate to taxable income with no bracket transitions.
A six-figure New York income illustrates why progressive state taxes cannot be reduced to a single flat rate. The scenario verifies a hand-worked bracket example end to end using the 2025 NY schedule.
IRS Publication 505 Worksheet 2-6 reduces 2026 itemized deductions by 5.4% of the smaller of total itemized deductions or taxable income above the filing-status threshold. This case pins the branch where itemized deductions are smaller than the income excess.
A dividend feed with Form 1099-DIV Box 5 characterization must also include gross ordinary-dividend cash metadata. Box 5 is tracked as Section 199A eligible, but it is not used as a cash-amount fallback.
A REIT distribution may arrive with Form 1099-DIV Box 5 characterization, but the taxpayer must still satisfy the Section 199A holding-period rule. Shares bought on the distribution date do not produce qualified REIT dividends, so the cash remains ordinary dividend income without a Section 199A dividend amount.
A RIC or REIT distribution paid in January can be reportable in the prior tax year when the feed supplies an explicit tax-recognition date. The tax replay must honor that date instead of the January ex-date or payment date.
A fund distribution with ordinary dividends, qualified dividends, capital gain distributions, nondividend distributions, Section 199A dividends, tax-exempt interest, and specified private activity bond interest dividends should preserve each sourced Form 1099-DIV bucket instead of inferring one bucket from another.
A fund can report a Box 1b qualified-dividend candidate, but the taxpayer still must satisfy the IRS holding-period rule. Days with diminished risk of loss do not count, so the engine should reclassify the sourced qualified portion as ordinary when the effective holding period is too short.
Preferred-stock dividends attributable to periods longer than 366 days use the IRS 181-day window and require more than 90 days of qualified holding period, rather than the common-stock more-than-60-day rule.
A municipal-bond fund distribution reported only in Form 1099-DIV Box 12 should remain outside ordinary dividend income while preserving the source portion that is taxable by the resident state.
A return-of-capital distribution should reduce stock basis first. Only the excess over remaining basis is capital gain.
A nondividend distribution that does not exceed remaining stock basis should reduce basis and avoid ordinary-dividend or capital-gain treatment.
The ACA and planning engines should expose the published 2026 HHS poverty guidelines directly, even though 2026 ACA marketplace plan-year calculations still use the 2025 open-enrollment FPL table.
For plan year 2026, the premium tax credit uses the pre-IRA cliff regime, 2025 HHS poverty guidelines, and the IRS indexed applicable-percentage table.
Form 8962 computes the premium tax credit month by month. A partial-year SLCSP input should subtract only the monthly contribution amounts for covered months rather than a full annual contribution.
Form 8962 limits each monthly premium tax credit to the lesser of the enrollment premium and the SLCSP premium reduced by the monthly contribution amount.
The ACA and planning engines should expose the published 2026 Hawaii HHS poverty guidelines directly, including the separate additional-person amount above household size eight.
For plan year 2026, Alaska households use the Alaska HHS poverty guideline instead of the contiguous-state guideline when computing MAGI as a percentage of FPL and the premium tax credit.
For plan year 2026, the default pre-IRA premium tax credit regime has no applicable-percentage row above 400% FPL, so income one dollar above the 400% threshold loses the credit.
Publication 974 generally denies the premium tax credit to married filing separately taxpayers unless a listed exception applies.
Form 8962 instructions allow certain married filing separately taxpayers to claim the premium tax credit when the domestic-abuse or spousal-abandonment exception applies.
Form 8962 instructions generally require household income of at least 100% FPL and route lower-income households through specific exceptions.
Form 8962 instructions describe below-FPL exceptions for good-faith Marketplace estimates with APTC or certain lawfully present aliens who are not Medicaid-eligible.
The 2024 Form 8962 instructions cap excess advance premium tax credit repayment below 400% FPL using Table 5. At 250% FPL, a single filer repays no more than $950 of excess APTC.
The 2025 Form 8962 instructions cap excess advance premium tax credit repayment below 400% FPL using Table 5. At 150% FPL, a single filer repays no more than $375 of excess APTC.
IRS PTC guidance states that taxpayers above 400% FPL have no excess advance premium tax credit repayment cap, so the full excess APTC is additional tax. (Below-400% FPL Table 5 caps for 2026 have not yet been published; this scenario uses the unambiguous no-cap regime at 511% FPL.)
Revenue Procedure 2025-25 sets the 2026 section 36B required contribution percentage at 9.96%. Employer-sponsored minimum essential coverage is affordable when the employee's annual required contribution for lowest-cost self-only minimum-value coverage does not exceed that percentage of household income.
A Medicare-age single beneficiary with MAGI one dollar above the 2023 individual threshold enters the first IRMAA tier. When Part D is included, the annual surcharge combines both CMS-published monthly adjustment amounts.
A Medicare-age single beneficiary with MAGI one dollar above the 2024 individual threshold enters the first IRMAA tier. When Part D is included, the annual surcharge combines both CMS-published monthly adjustment amounts.
A Medicare-age single beneficiary with MAGI one dollar above the 2025 individual threshold enters the first IRMAA tier. When Part D is included, the annual surcharge combines both CMS-published monthly adjustment amounts.
A Medicare-age single beneficiary with MAGI one dollar above the 2026 individual threshold enters the first IRMAA tier. When Part D is included, the annual surcharge combines both CMS-published monthly adjustment amounts.
CMS publishes a separate 2026 IRMAA table for beneficiaries who are married filing separately and lived with their spouse. A $150,000 MAGI falls into that steep middle tier, not the ordinary individual-return tier.
When a Medicare beneficiary has an accepted life-event IRMAA redetermination, the planning tax kernel should price the billing year using the original MAGI for months before the adjustment and the adjusted MAGI from the effective month onward.
Retirement projections carry final annual AGI components into the next year's IRMAA MAGI history. Roth conversions are already included in pre-tax ordinary gross, so the conversion amount must not be added again outside AGI.
When an HSA distribution is fully matched to documented qualified medical expenses, the draw is excluded from ordinary taxable income and does not carry the 20% additional tax.
When an under-65 owner must draw from an HSA to cover a tax-payment fallback, documented qualified medical expense reimbursement capacity is consumed first. The remaining non-qualified HSA draw is ordinary taxable income and carries the 20% additional tax, including iterative penalty-funding draws when the penalty itself is paid from the HSA.
When an HSA owner has reached age 65, non-qualified HSA fallback distributions remain ordinary taxable income, but the 20% additional tax no longer applies.
When an HSA owner died before the distribution year, non-qualified HSA fallback distributions remain ordinary taxable income, but Pub. 969's death exception removes the 20% additional tax.
When an HSA owner is disabled by the distribution year, non-qualified HSA fallback distributions remain ordinary taxable income, but Pub. 969's disability exception removes the 20% additional tax.
For 2025 through 2028, an eligible age-65+ single filer starts with a $6,000 enhanced senior deduction. At $100,000 MAGI, the deduction is reduced by 6% of the $25,000 excess above the $75,000 threshold.
For 2025 through 2028, a married filing jointly household with two eligible age-65+ spouses can start with a $12,000 enhanced senior deduction. At $200,000 MAGI, each spouse's $6,000 amount is reduced by 6% of the $50,000 excess above the $150,000 joint threshold.
IRS Schedule 1-A guidance says married taxpayers must file jointly to claim the enhanced senior deduction. The engine preserves the age-eligible count but returns zero for married-filing-separately returns.
IRS Schedule 1-A guidance requires each taxpayer or spouse claiming the enhanced senior deduction to have a valid Social Security number. The edge-case engine now accepts a valid-SSN count instead of assuming every age-eligible senior qualifies.
After a Roth IRA owner dies, beneficiary minimum-distribution rules can apply. A required inherited Roth IRA distribution should reduce the inherited Roth balance and move cash to taxable without creating ordinary income in this qualified-distribution fixture.
A beneficiary can be required to empty an inherited Roth IRA by the 10-year deadline. In this qualified inherited Roth fixture, the terminal-year distribution should fully deplete the inherited Roth account and move cash to taxable without creating ordinary income or federal income tax.
When an inherited traditional IRA is modeled under the 10-year rule, the terminal year must distribute the remaining account balance and include the taxable distribution in ordinary income.
When an IRA owner dies before the required beginning date and the beneficiary is not a designated beneficiary, Publication 590-B applies the five-year rule. The inherited traditional IRA must be fully distributed by the year containing the fifth anniversary of death.
Publication 590-B defines the 10-year rule deadline from the year containing the owner's death. The engine therefore requires the decedent death year rather than inferring a statutory deadline from distribution activity.
A designated beneficiary using the 10-year rule after the decedent's required beginning date should take annual inherited-account RMDs when the life-expectancy divisor metadata is supplied.
For a beneficiary taking inherited traditional IRA distributions under the life-expectancy rule, the first annual RMD is the prior-year-end balance divided by the explicit Table I single-life divisor.
Publication 590-B allows eligible designated beneficiaries to take inherited IRA distributions using the life-expectancy rule. The fixture verifies that this path uses the explicit Table I divisor and does not fall back to 10-year terminal depletion.
A traditional IRA owner who is age 75 in 2026 and is not eligible for the special more-than-10-years-younger spouse table should use the Uniform Lifetime Table. The required distribution equals the prior December 31 balance divided by the Table III age-75 divisor.
A traditional IRA owner whose spouse is the sole beneficiary and more than 10 years younger should use the Joint and Last Survivor Life Expectancy table instead of the default Uniform Lifetime Table.
For a 2021 traditional IRA RMD, a 75-year-old owner whose 60-year-old spouse is the sole beneficiary uses the pre-2022 Joint Life and Last Survivor Table II divisor, not the 2022+ table or Uniform Lifetime Table.
A traditional IRA owner born in 1960 should not use the age-73 SECURE 2.0 tier. The first lifetime RMD year is age 75, and the required distribution equals the prior December 31 balance divided by the Uniform Lifetime Table divisor.
A missed 2022 required minimum distribution uses the pre-SECURE 2.0 excess-accumulation tax rate rather than the later reduced 25% rate.
A missed 2026 required minimum distribution uses the SECURE 2.0 25% excess-accumulation tax when the shortfall is not modeled as timely corrected.
A 2026 required minimum distribution shortfall corrected within the statutory correction window uses the reduced 10% excess-accumulation tax rate.
After SECURE 2.0, a designated Roth account in a 401(k) plan should not generate a lifetime required minimum distribution for the original owner, even when the owner is well past the traditional-account RMD age.
A traditional IRA owner old enough to be subject to lifetime required minimum distributions should still have no 2020 RMD because the CARES Act waived 2020 required minimum distributions.
A traditional IRA owner born before July 1, 1949 reached age 70½ in 2019, so the pre-SECURE Act required beginning age applies and the 2019 RMD is based on the pre-2022 Uniform Lifetime Table.
An eligible direct IRA qualified charitable distribution should count toward the year's required minimum distribution while excluding that charitable amount from ordinary income.
Publication 590-B reduces the excludable portion of a qualified charitable distribution by deductible IRA contributions made after age 70½ that have not already reduced a prior QCD exclusion.
When an IRA owner schedules more than the 2026 qualified charitable distribution exclusion limit, only $111,000 should be treated as nontaxable QCD and the fixture should surface that cap.
The 2023 split-interest qualified charitable distribution rule introduced a one-time $50,000 limit. A scheduled transfer above that amount should be capped, counted toward the owner's annual QCD room, and still satisfy RMDs.
IRS Notice 2025-67 raises the one-time qualified charitable distribution limit for split-interest entities to $55,000 for 2026. A scheduled transfer above that amount should be capped, counted toward the owner's annual QCD room, and still satisfy RMDs.
IRS Notice 2025-67 sets the aggregate 2026 QCD exclusion at $111,000 and the one-time split-interest sublimit at $55,000. Because split-interest QCDs are still qualified charitable distributions, a $100,000 direct QCD should leave only $11,000 of annual exclusion room for the split-interest transfer.
IRS Notice 2024-80 sets the 2025 qualified charitable distribution exclusion limit at $108,000. When an IRA owner schedules more than that amount, only $108,000 should be treated as nontaxable QCD and the fixture should surface that cap.
Publication 590-B allows qualified charitable distributions once the IRA owner is at least age 70½. When an annual planning fixture includes an exact birth date proving the owner reaches 70½ during the year, the engine should model the QCD without requiring a manual eligibility override.
The tax-free recovery portion of an annuity payment should provide household spending cash without increasing ordinary income or forcing an IRA withdrawal.
A partly taxable annuity payment should fund spending at its full cash value while only the taxable pension component enters ordinary income.
A 61-year-old participant in 2026 can use the SECURE 2.0 age-60-to-63 catch-up limit, and catch-up deferrals are Roth-only when prior-year plan-sponsor FICA wages exceed the IRS threshold.
For 2026, prior-year plan-sponsor FICA wages exactly equal to the IRS $150,000 threshold should not force catch-up deferrals to Roth; the mandatory Roth rule applies only when wages exceed that threshold.
The SECURE 2.0 enhanced catch-up amount applies only when the participant turns 60, 61, 62, or 63 during the calendar year. A participant age 64 in 2026 should receive the regular age-50 catch-up amount, not the enhanced amount.
Beginning in 2026, catch-up contributions by participants whose prior-year plan-sponsor FICA wages exceed the IRS threshold must be designated Roth contributions when the plan offers catch-up contributions with a Roth feature. If the modeled plan lacks that Roth feature, the catch-up amount should be surfaced as unavailable rather than treated as pretax.
A governmental 457(b) participant age 60 in 2025 can use the SECURE 2.0 age-60-to-63 catch-up amount. The engine applies the age catch-up branch without requiring Roth catch-up treatment before the modeled Roth catch-up effective year.
The final-three-years special 457(b) catch-up can allow up to twice the annual limit, but IRS rules do not allow using it in the same taxable year as the age-based catch-up.
A governmental 457(b) participant age 60 in 2026 can use the SECURE 2.0 age-60-to-63 catch-up amount. If prior-year plan-sponsor wages exceed the Roth catch-up threshold and the plan has Roth, the catch-up portion must be Roth.
The final-three-years special 457(b) catch-up can allow up to twice the annual limit, but IRS rules do not allow using it in the same taxable year as the age-based catch-up.
When the mandatory Roth catch-up rule applies but a governmental 457(b) plan does not support designated Roth contributions, the age-based catch-up is not available in this modeled surface.
A single taxpayer who is covered by a workplace retirement plan in 2025 has a traditional IRA deduction phaseout from $79,000 to $89,000 of modified AGI. At the midpoint, the deductible IRA limit is half of the age-50 total IRA limit after the IRS worksheet rounding convention.
A married-filing-jointly taxpayer who is not covered by a workplace retirement plan but whose spouse is covered uses the $236,000 to $246,000 traditional IRA deduction phaseout. The same $236,000 to $246,000 range applies to Roth IRA contributions for MFJ taxpayers.
A single taxpayer who is covered by a workplace retirement plan in 2026 has a traditional IRA deduction phaseout from $81,000 to $91,000 of modified AGI. At the midpoint, the deductible IRA limit is half of the age-50 total IRA limit after the IRS worksheet rounding convention.
A married-filing-jointly taxpayer who is not covered by a workplace retirement plan but whose spouse is covered uses the $242,000 to $252,000 traditional IRA deduction phaseout. The same $242,000 to $252,000 range applies to Roth IRA contributions for MFJ taxpayers.
A taxpayer age 55 or older with family HDHP coverage in 2025 can add the statutory HSA catch-up amount to the IRS family HSA contribution limit, while the HDHP deductible and out-of-pocket caps come from the same revenue procedure.
A taxpayer age 55 or older with family HDHP coverage in 2026 can add the statutory HSA catch-up amount to the IRS family HSA contribution limit, while the HDHP deductible and out-of-pocket caps come from the same revenue procedure.
A taxpayer under age 55 with self-only HDHP coverage in 2026 receives the IRS self-only HSA contribution limit and does not receive the age-55 additional contribution.
A taxpayer age 55 or older who has self-only HDHP coverage for six months and family HDHP coverage for six months can compute the month-by-month contribution-limit amount and, when explicitly applying the last-month rule, compare it with the December coverage limit.
A self-only plan that does not meet the 2026 HDHP minimum deductible is not HSA-eligible even when its out-of-pocket maximum is within the IRS limit.
Notice 2026-5 confirms that the OBBBA permanent telehealth and remote-care safe harbor applies retroactively for plan years beginning after December 31, 2024. A 2025 statutory HDHP that otherwise meets the deductible and out-of-pocket tests should remain HSA-eligible when it covers telehealth before the deductible.
Starting in 2026, ACA bronze and catastrophic plans are treated as HDHPs for HSA eligibility even when they are not purchased through an Exchange and do not satisfy the ordinary HDHP deductible and out-of-pocket tests.
Beginning in 2026, a qualifying direct primary care service arrangement does not by itself disqualify an otherwise HSA-eligible individual when the fixed periodic fee stays within the statutory monthly limit.
Beginning in 2026, direct primary care service arrangements can be disregarded for HSA eligibility only when the fixed periodic fee stays within the statutory monthly cap. A self-only arrangement charging more than $150 per month should fail closed.
A 60-year-old participant in a regular SIMPLE IRA plan in 2025 can use the SECURE 2.0 age-60-to-63 SIMPLE catch-up limit, producing a higher employee deferral limit than the age-50 catch-up amount.
SEP employer contributions for a common-law employee are capped by both the 25% compensation rule and the 2025 SEP dollar limit. Compensation above the annual compensation limit cannot increase the contribution.
A 60-year-old participant in a regular SIMPLE IRA plan in 2026 can use the SECURE 2.0 age-60-to-63 SIMPLE catch-up limit, producing a higher employee deferral limit than the age-50 catch-up amount.
Certain applicable SIMPLE IRA plans have a higher 2026 salary-reduction limit but a separate age-50 catch-up amount. The engine exposes that plan-specific branch instead of applying the regular SIMPLE limits to every plan.
SEP employer contributions for a common-law employee are capped by both the 25% compensation rule and the 2026 SEP dollar limit. Compensation above the annual compensation limit cannot increase the contribution.
A self-employed owner cannot multiply Schedule C profit by the plan percentage directly. Publication 560 uses a reduced contribution rate after subtracting the deductible part of self-employment tax.
A married-filing-jointly household at the top of the 2025 50% Saver's Credit bracket can receive 50% of up to $2,000 of qualified contributions per spouse, capped at a $2,000 preliminary credit.
Form 8880 reduces qualified retirement savings contributions by recent retirement distributions and then limits the nonrefundable credit to remaining tax liability.
A married-filing-jointly household at the top of the 2026 50% Saver's Credit bracket can receive 50% of up to $2,000 of qualified contributions per spouse, capped at a $2,000 preliminary credit.
Form 8880 reduces qualified retirement savings contributions by recent retirement distributions and then limits the nonrefundable credit to remaining tax liability.
IRS Notice 2024-80 defines smaller retirement-plan dollar limits used by specialized workflows, including starter 401(k)/403(b) plans, qualified longevity annuity contracts, domestic-abuse distributions, and qualified long-term-care distributions made after December 29, 2025.
IRS Notice 2025-67 also defines smaller retirement-plan dollar limits used by specialized workflows, including starter 401(k)/403(b) plans, qualified longevity annuity contracts, domestic-abuse distributions, and qualified long-term-care distributions.
The IRS 2026 inflation-adjustment guidance and OBBB update set the 2026 basic exclusion amount at $15,000,000, keep the present-interest annual gift exclusion at $19,000 per donee, and increase the annual exclusion for gifts to a noncitizen spouse to $194,000.
IRS 2025 guidance sets the basic exclusion amount at $13,990,000, the present-interest annual gift exclusion at $19,000 per donee, the split-gift exclusion at $38,000, and the noncitizen-spouse annual exclusion at $190,000. The Form 706 filing threshold uses gross estate plus adjusted taxable gifts and any specific exemption.
Form 709 instructions require a consenting spouse signature for a gift-splitting election. Without consent, the donor's present-interest gift uses only the donor's annual exclusion.
Form 709 instructions allow a larger annual exclusion for present-interest gifts to a spouse who is not a U.S. citizen when the excess over the ordinary annual exclusion would otherwise qualify for the marital deduction. The transfer does not receive the unlimited marital deduction.
IRS 2025 Schedule 8812 guidance sets the Child Tax Credit at $2,200 per qualifying child, the refundable Additional Child Tax Credit cap at $1,700 per child, and the Credit for Other Dependents at $500. The credit phases out by $50 per $1,000 or fraction above the modified-AGI threshold.
IRS 2026 guidance sets the Child Tax Credit at $2,200 per qualifying child, the refundable Additional Child Tax Credit cap at $1,700 per child, and the Credit for Other Dependents at $500. The credit phases out by $50 per $1,000 or fraction above the modified-AGI threshold.
IRS Child Tax Credit guidance requires the taxpayer, or spouse on a joint return, and each qualifying child to have an employment-valid Social Security number for the Child Tax Credit and Additional Child Tax Credit. The Credit for Other Dependents remains separately modeled as a nonrefundable credit.
Schedule 8812 requires the taxpayer, and spouse on a joint return, to have an SSN or ITIN by the return due date, including extensions, before claiming the Credit for Other Dependents. The engine gates ODC separately from the CTC and ACTC filing-unit SSN rule.
IRS Child Tax Credit guidance requires each qualifying child to satisfy age, SSN, relationship, support, residency, dependent-claim, joint-return, and citizenship or residency gates. The engine zeros CTC and ACTC when supplied candidate children fail explicit gates and only counts CTC-ineligible children for ODC when the caller supplies that separate eligible count.
IRS Child Tax Credit guidance limits the Credit for Other Dependents to dependents claimed on the return who are U.S. citizens, nationals, or resident aliens, have an SSN, ITIN, or ATIN, and are not eligible for CTC/ACTC.
Schedule 8812 allows taxpayers with three or more qualifying children to compare the 15% earned-income ACTC limit with a payroll-tax alternative. The engine requires the exact Schedule 8812 line 21 amount so Additional Medicare and RRTA worksheet adjustments are not silently ignored.
IRS Rev. Proc. 2024-40 sets the 2025 maximum adoption credit at $17,280 per eligible child and phases the credit out between $259,190 and $299,190 of modified AGI. The 2025 Form 8839 instructions make up to $5,000 of the adoption credit refundable.
IRS Rev. Proc. 2025-32 sets the 2026 maximum adoption credit at $17,670 per eligible child, phases the credit out between $265,080 and $305,080 of modified AGI, and sets the refundable portion at $5,120.
Form 8839 instructions let a finalized U.S. special-needs adoption use the maximum adoption credit for the child even when qualified adoption expenses are zero. The 2026 refundable portion remains capped at the source-backed refundable limit.
Form 8839 instructions exclude expenses for adopting a spouse's child from qualified adoption expenses. The engine models that eligibility gate explicitly instead of assuming every expense-labeled adoption is credit eligible.
IRS Rev. Proc. 2024-40 keeps the maximum student loan interest deduction at $2,500 for 2025 and sets phaseout ranges of $85,000-$100,000 for non-joint filers and $170,000-$200,000 for joint returns.
IRS Rev. Proc. 2025-32 keeps the maximum student loan interest deduction at $2,500 for 2026 and sets phaseout ranges of $85,000-$100,000 for non-joint filers and $175,000-$205,000 for joint returns.
IRS Topic 456 disallows the student loan interest deduction when the taxpayer can be claimed as a dependent on another return, even when the taxpayer paid qualified student loan interest and is below the MAGI phaseout range.
IRS Topic 456 disallows the student loan interest deduction for married-filing-separately returns, even when qualified interest is paid and modified AGI is otherwise below the phaseout range.
IRS Topic 456 requires the taxpayer to be legally obligated on a qualified student loan. Interest on debt that fails the legal-obligation or qualified-education-expense gates is not deductible even before the MAGI phaseout.
IRS Topic 456 requires qualified student loan expenses to be for education during an academic period for an eligible student and paid or incurred within a reasonable period around the loan. Interest on a loan that fails those facts is not deductible.
IRS Publication 970 disallows student loan interest deductions for interest paid through employer educational assistance, tax-free QTP earnings, and tax-free repayment assistance. The engine subtracts those source-specific amounts before applying the $2,500 cap and MAGI phaseout.
IRS Publication 970 says loans from related persons and qualified employer plans are not qualified student loans. The engine models those source-of-loan gates explicitly instead of assuming every education-purpose loan is qualified.
IRS Topic 456 denies the student loan interest deduction when either spouse on a joint return is claimed as a dependent on someone else's return.
IRS Rev. Proc. 2024-40 sets the 2025 education savings bond interest exclusion phaseout range at $99,500-$114,500 for non-joint filers and $149,250-$179,250 for joint returns. The exclusion also prorates interest when adjusted qualified education expenses are less than bond proceeds.
IRS Rev. Proc. 2025-32 sets the 2026 education savings bond interest exclusion phaseout range at $101,800-$116,800 for non-joint filers and $152,650-$182,650 for joint returns. The exclusion also prorates interest when adjusted qualified education expenses are less than bond proceeds.
IRS Publication 970 says the education savings bond interest exclusion is unavailable when filing status is married filing separately. The engine preserves the otherwise eligible interest calculation and then denies the exclusion with an explicit reason.
IRS Publication 970 limits the education savings bond interest exclusion to qualified U.S. savings bonds whose owner was at least age 24 before the bond issue date. The engine models that bond-level eligibility gate explicitly instead of assuming every otherwise expense-matched redemption is excludable.
IRS Rev. Proc. 2024-40 sets the 2025 age-banded limits for qualified long-term-care insurance premiums includible as medical care under section 213(d)(10).
IRS Rev. Proc. 2025-32 sets the 2026 age-banded limits for qualified long-term-care insurance premiums includible as medical care under section 213(d)(10).
IRS Rev. Proc. 2025-32 sets the 2026 section 213(d)(10) qualified long-term-care premium limit for attained ages 40 or younger at $500.
IRS Rev. Proc. 2025-32 sets the 2026 section 213(d)(10) qualified long-term-care premium limit for attained ages over 70 at $6,200.
Publication 502 limits deductible long-term-care insurance premiums to qualified contracts. A contract that does not provide only qualified long-term-care services fails before the age-banded premium cap is applied.
Publication 502 denies a medical-expense deduction for long-term-care premiums paid with elected tax-free retirement-plan distributions that would otherwise have been taxable.
New York City local income tax is a separate resident schedule. A 2025 single filer with $85k taxable income crosses into the 3.876% top NYC local bracket.
New Hampshire's Interest and Dividends Tax was still in phaseout for 2024. A single filer receives the standard $2,400 exemption before the 3% tax applies.
The Tennessee Hall income tax phased down to 1% for 2020 and was repealed for tax years beginning January 1, 2021.
South Carolina allows a 44% deduction on net capital gains held at least one year, so the modeled state taxable fraction is 56%.
Washington's standalone capital-gains tax uses the 2025 standard deduction, then 7% on the first $1M of taxable Washington gains and 9.9% above that amount.
Massachusetts short-term capital gains use the post-2023 8.5% rate rather than the old 12% rate.
Massachusetts taxes long-term collectibles gains at 12% after a 50% deduction. A $10k collectibles gain produces $600 of base MA collectibles tax.
$180k income + $100k LT gain → MAGI $280k. NIIT = 3.8% × min($100k investment income, $80k over threshold).
$0 ordinary income + $30k LT gain → $0 federal LTCG tax. The 0% bracket extends to ~$49k for Single filers.
The same $40k LTCG is taxed at 0% with $0 wages, but at 15% with $300k wages. Capital gains "stack" on top of ordinary income.
$30k ordinary (non-qualified) dividends with no wages still produce federal tax because they are taxed like short-term income.
$1M taxable income in California (top bracket 13.3%). State tax should exceed $100k.
$200k in short-term gains: Married Filing Jointly brackets are wider, so total federal tax is lower than Single.
Even at $1M taxable income, Texas state income tax remains $0 in the state-tax engine.
11 scenarios
A drawdown that spans a weekend should count Saturday and Sunday in its duration. This is a common source of confusion when users expect trading days instead of calendar days.
Price path [100, 50, -10] (leveraged blowup). Max drawdown = 110%, not clamped to 100%.
2019 closes at 100, 2020 opens at 110, closes at 132. The 2020 return is 32% (from prior close, not open).
Two drawdowns (1 day and 6+ days) with recovery between. The engine reports the longest one.
252 daily returns of +0.04% each (≈10% annualized) with tiny noise. rf=4%. The Sharpe ratio should be high and positive.
Returns with positive skew (many small gains, rare small losses). Sortino exceeds Sharpe because downside volatility is less than total volatility.
Value path from 100→120 over 252 trading days with a 10% drawdown. Calmar = CAGR / max drawdown.
$100 → $200 over 756 trading days (3 years). CAGR = (200/100)^(1/3) - 1 ≈ 26%.
A portfolio crashes 50% in month 2, wiping out most of the withdrawal budget. ArthaPilot clamps each withdrawal to the available balance, so the total withdrawn reflects what the portfolio could actually pay, not a phantom fixed amount.
The correlation engine reports finite JSON-safe values even when one asset has constant returns. Off-diagonal correlations involving that zero-variance asset are set to 0.0, diagonal self-correlations stay 1.0, and ordinary nonconstant series still produce the expected Pearson correlation.
A 21-value curve: 19 all-time highs, then one trough at −10%, then recovery. One method averages only over the single drawdown observation (−10%). ArthaPilot averages the drawdown depth at every point, so the 19 ATH days (0% drawdown each) pull the average down to ~0.5%.
6 scenarios
Success rate counts the paths that were never depleted. With no withdrawals the portfolio cannot deplete, so the figure would read 100% whatever returns, horizon, or allocation you entered. This scenario verifies the engine reports the metric as undefined instead of a 100% that cannot mean anything.
Block bootstrap with 12-month history wraps around the end seamlessly. All simulated values come from the original history.
-30%/month returns + $60k/year withdrawal on $100k. Once the portfolio hits $0, it stays there (no borrowing).
Moderate negative returns (-0.5%/month) with 10% annual percent-of-portfolio withdrawal. Portfolio shrinks but never hits $0.
With 0% monthly returns and a fixed $12k annual withdrawal, a $100k portfolio is eventually depleted. This illustrates pure spending-rate risk.
Two retirement paths use the same return set and identical average return, but in reverse order. Early losses can deplete capital even when long-run averages match.
6 scenarios
A maximum-return portfolio is only useful if it respects the risk budget the user asked for. This scenario verifies the target-volatility constraint is actually enforced.
Three assets with different volatilities. The min-volatility optimizer finds a portfolio with lower vol than naive equal-weight.
Three near-uncorrelated assets with distinct volatilities. The Maximum Diversification objective ignores expected returns and tilts toward inverse-volatility weighting, so the low-volatility asset receives more weight than the medium-volatility asset, which in turn receives more weight than the high-volatility asset.
One asset has positive skew (many small gains, rare losses), the other negative skew. Max Sortino should favor the positive-skew asset.
risk_parity + allow_leverage=True is rejected because leverage breaks the equal-risk-contribution invariant.
A low-volatility asset and a higher-return volatile asset should produce a long-only efficient frontier that starts near the minimum-variance mix and ends fully allocated to the higher-return asset.
5 scenarios
A deterministic monthly rotation between two appreciating assets can look fine pre-tax while realizing enough short-term gains to materially reduce after-tax wealth in a taxable account.
The exact same monthly rotation creates no tax drag when the account type is tax-free. This isolates account treatment from the trading pattern itself.
When a taxable position falls enough to trigger tax-loss harvesting, ArthaPilot should realize the loss, rotate into the substitute ETF, and avoid immediately buying the original ticker back during the cooldown window.
A loss realized near year-end and repurchased within 30 days in the next tax year should create wash-sale records and change the prior year's settled tax bill.
The same bond-fund dividend stream should produce tax drag in a taxable account and none in a tax-free account, isolating dividend taxation from the market path.
3 scenarios
Same μ/σ but with fees: optimal leverage (net) is lower than optimal leverage (gross).
$5k SPY (1x) + $5k UPRO (3x): total exposure $20k / total value $10k = 2.0x effective leverage.
Alternating +10%/−10% daily returns for 252 days. The 2x leveraged ETF loses more than the unleveraged version due to volatility drag.
1 scenarios
A 50/50 SPY/UPRO mix has 2x SPY-family exposure. Moving $2,500 from UPRO to SPY lowers exposure to 1.5x with the minimum dollar turnover because the 3x-to-1x leverage gap is two exposure dollars per dollar moved.
