System and method for forecasting tax effects of financial transactions

• US 9,773,276 B2
• Filed: 08/20/2007
• Issued: 09/26/2017
• Est. Priority Date: 03/01/2001
• Status: Active Grant

• Current Assignee: Charles Schwab & Company Incorporated (Charles Schwab Corporation)
• Original Assignee: Charles Schwab & Company Incorporated (Charles Schwab Corporation)
• Inventors: Foley, John T., Nicklanovich, Steven
• Primary Examiner(s): Shrestha, Bijendra K
• Application Number:
  US11/841,601
• Publication Number:
  US 20080033860A1
• Time in Patent Office: 3,690 Days
• Field of Search: 705 35
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 20/207 Tax processing
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/10 Tax strategies

Abstract

A system and method for forecasting tax effects of financial transactions is provided. The system and method include a series of web pages. The web pages allow a user to 1) determine their federal and state tax rates, 2) describe the asset they wish to sell. Additional web pages then display the tax consequences of the sale of the asset along with the details of the calculations used to evaluate those consequences. Still more web pages can be used to describe an asset to buy. In this case, the displayed consequences are expanded to compare the benefit of holding the current asset against the benefit of acquiring the new asset.

Claims

1. A computer system for forecasting and comparing financial effects of holding a first asset versus selling the first asset and purchasing a second asset, comprising:

a processor; and

a non-transitory computer readable medium comprising code, executable by a processor, for implementing a method comprising the steps of

generating, with the processor, a first sequence of one or more web pages, wherein the first sequence of the one or more web pages presents a user with an option using a link to compare the financial effects,

in response to selection of the option using the link to compare the financial effects, generating a second sequence of one or more web pages, wherein the second sequence of one or more web pages contains a plurality of fields for the user to enter information describing the first asset, second asset, and user tax rates and wherein the second sequence of one or more web pages further includes a tax rate assistance option that generates a sequence of one or more web pages to assist the user in determining the user'"'"'s tax rate based on the user'"'"'s taxable income,

wherein the sequence of one or more web pages to assist the user in determining the user'"'"'s tax rate based on the user'"'"'s taxable income comprises fields for user input of information describing the user'"'"'s tax filing status, taxable income, state income tax rates, and state long term capital gains rates,

in response to receiving information describing the first asset, calculating the financial effects of holding or selling the first asset using information describing the first asset,

in response to receiving information describing the second asset, calculating the financial effects of selling the first asset and buying the second asset using information describing the first asset and second asset, and

generating a third sequence of one or more web pages displaying the financial effects of holding or selling the first asset, wherein the financial effects include investment tips that comprise an amount of time that the first asset must be held to avoid short-term capital gains taxes.

2. The system of claim 1, wherein the plurality of fields are configured to receive at least one of the following:

a combined federal and state ordinary income tax rate;

a combined federal and state long-term capital gains tax rate;

a first asset ticker symbol;

a date of purchase of the first asset;

a cost per share at purchase of the first asset;

a first load or commission paid at purchase of the first asset;

a number of shares to be sold of the first asset;

a target or estimated price per-share that the first asset will bring when sold; and

a second load or commission to be paid at the sale of the first asset.

3. The system of claim 1, wherein the financial effects include at least one of the following:

a time the first asset must be held to avoid short-term capital gains taxes and an amount saved by utilizing long-term capital gains tax rates,

an estimated capital gain or loss,

an estimated net proceed from a sale of the first asset, and

an estimated capital gains tax due resulting from the sale of the first asset.

4. The system of claim 1, wherein the plurality of fields are configured to receive at least one of the following:

a combined federal and state ordinary income tax rate;

a combined federal and state long-term capital gains tax rate;

a first asset ticker symbol;

a date of purchase of the first asset;

a cost per share at purchase of the first asset;

a first load or commission paid at purchase of the first asset;

a number of shares to be sold of the first asset;

a target or estimated price per-share that the first asset will bring when sold;

a second load or commission to be paid at the sale of the first asset;

an anticipated rate of return on the first asset;

a second asset ticker symbol;

an amount to invest of the second asset;

a third load or commission to be paid at purchase for the second asset;

a second anticipated rate of return on the second asset; and

an expected number of years that either the first or the second asset will be held.

5. The system of claim 1, wherein the financial effects include at least one of the following:

a time the first asset must be held to avoid short-term capital gains taxes and an amount saved by utilizing long-term capital gains tax rates,

an estimated capital gain or loss,

an estimated net proceed from a sale of the first asset,

an estimated capital gains tax due resulting from the sale of the first asset, and

a holding time period for holding the second asset so that the second asset will have a value that would be equal to the value for the first asset if the first asset is not sold.

6. The system of claim 1, wherein the plurality of fields are configured to receive a target or estimated price per-share that the first asset will bring when sold and the second sequence of one or more web pages includes a link to obtain the current price of the stock to be sold.

7. The system of claim 1, wherein one or more web pages in the third sequence show the calculations used to calculate the financial effects of selling the first asset.

8. The system of claim 1, wherein the investment tips further comprise an amount of money saved by delaying the sale of the first asset by the amount of time that the first asset must be held to avoid short-term capital gains taxes and thereby utilizing long-term capital gains tax rates.

9. The system of claim 1, wherein the method comprises displaying the first sequence of one or more web pages, second sequence of one or more web pages, and third sequence of one or more web pages.

10. The computer system of claim 9, wherein the investment tips are provided in a textual form.

11. A computer system for forecasting financial effects of a financial transaction, the system comprising:

a processor; and

a non-transitory computer readable medium coupled to the processor, the computer readable medium comprising code, executable by a processor, for implementing a method comprising the steps of

generating a first sequence of one or more web pages, wherein the first sequence of one or more web pages presents a user with a first option of calculating tax on a sale of an asset and a second option of comparing two investment options on an after-tax basis, where a first investment option is continuing to hold the asset, and a second investment option is selling the asset and purchasing a different asset,

wherein the first option and the second option are presented using links in the first sequence of one or more web pages,

in response to selection of the first option, generating a second sequence of one or more web pages, the second sequence of one or more web pages containing fields for user input of information describing the user'"'"'s tax rates and information describing the asset to be sold,

wherein the second sequence of one or more web pages further presents the user with a tax rate assistance option and, in response to the user selecting the tax rate assistance option, generating a sequence of one or more web pages to assist the user in determining the user'"'"'s tax rate based on the user'"'"'s taxable income,

in response to receiving information describing the user'"'"'s tax rates and information describing the asset to be sold, calculating the financial effects resulting from the sale of the asset to be sold, and

generating a third sequence of one or more web pages displaying the financial effects of selling the asset to be sold, wherein the financial effects include a time the first asset must be held to avoid short-term capital gains taxes and an amount saved by utilizing long-term capital gains tax rates.

12. The computer system as recited in claim 11, wherein the method comprises generating a fourth sequence of one or more web pages summarizing calculations used in the step of calculating financial effects.

13. The computer system as recited in claim 11, wherein the method further comprises:

in response to the user selecting the second option, generating a fifth sequence of one or more web pages, the fifth sequence of one more web pages containing fields for user input of information describing the user'"'"'s federal and state tax rates, and information describing the asset to be sold, and information describing the different asset to be purchased.

14. The computer system as recited in claim 11, wherein calculating financial effects further comprises:

calculating capital gain or loss resulting from the sale of the asset;

calculating net proceeds resulting from the sale of the asset; and

calculating estimated tax resulting from the sale of the asset.

15. The computer system as recited in claim 11, wherein information describing the user'"'"'s tax rates includes a first rate at which the user pays state and federal income tax and a second rate at which the user pays state and federal capital gains tax.

16. The computer system as recited in claim 11, wherein the information describing the asset to be sold includes at least one of the following:

an asset ticker symbol;

a date of purchase of the asset;

a cost per share at purchase of the asset;

a first load or commission paid at purchase of the asset;

a number of shares to be sold of the asset;

a target or estimated price per-share that the asset will bring when sold;

a second load or commission to be paid at the sale of the asset; and

an anticipated rate of return on the asset.

17. The computer system as recited in claim 13, wherein the information describing the different asset to be purchased includes at least one of the following:

a different asset ticker symbol;

an amount to invest of the different asset;

a third load or commission to be paid at purchase of the different asset;

a different anticipated rate of return on the different asset; and

an expected number of years that the different asset will be held.

18. The computer system of claim 11, wherein the sequence of one or more web pages to assist the user in determining the user'"'"'s tax rate based on the user'"'"'s taxable income further presents the user with a taxable income calculator option and, in response to the user selecting the taxable income calculator option, generating a sequence of one or more web pages to assist the user in determining the user'"'"'s taxable income based on the user'"'"'s prior tax forms.

19. The computer system as recited in claim 11, wherein the information describing the asset to be sold includes at least an asset ticker symbol, and the second sequence of web pages presents the user with a symbol lookup option.

20. The computer system as recited in claim 11, wherein the method comprises displaying the first sequence of one or more web pages, second sequence of one or more web pages, and third sequence of one or more web pages.

21. The computer system as recited in claim 13, wherein the link to the first option, when selected, causes the user'"'"'s web browser to navigate to the second sequence of one or more webpages and the link to the second option, when selected, causes the user'"'"'s web browser to navigate to the fifth sequence of one or more webpages.

22. The computer system as recited in claim 11, wherein the sequence of one or more web pages to assist the user in determining the user'"'"'s tax rate based on the user'"'"'s taxable income, generated in response to the user selecting the tax rate assistance option, further comprises fields for user input of information describing the user'"'"'s tax filing status.

23. The computer system as recited in claim 22, wherein the user'"'"'s tax filing status is single, married filing jointly, or married filing separately.

24. The computer system as recited in claim 11, wherein the user'"'"'s state of residence is obtained from an internal database and the user'"'"'s state of residence is used in calculating the user'"'"'s tax rate.

25. A method for forecasting and comparing financial effects of holding a first asset versus selling the first asset and purchasing a second asset, the method comprising:

generating, with a server, a first sequence of one or more web pages, wherein the first sequence of the one or more web pages presents a user with an option using a link to compare the financial effects of holding or selling the first asset and purchasing the second asset;

in response to receiving a user'"'"'s selection of the option using the link to compare the financial effects, generating, with the server, a second sequence of one or more web pages, wherein the second sequence of one or more web pages includes a plurality of fields for the user to enter information describing the first asset, the second asset, and the user'"'"'s tax rates and wherein the second sequence of one or more web pages further includes a tax rate assistance option that generates a sequence of one or more web pages to assist the user in determining the user'"'"'s tax rate based on the user'"'"'s taxable income;

in response to receiving information describing the first asset, calculating, with the server, the financial effects of holding the first asset with the server;

in response to receiving information describing the first asset and the second asset, calculating, with the server, the financial effects of selling the first asset and purchasing a second asset; and

generating, with the server, a third sequence of one or more web pages displaying the financial effects, wherein the financial effects include a specified time the first asset must be held to avoid short-term capital gains taxes and an amount saved by utilizing long-term capital gains tax rates if the first asset is held for the specified time.

26. The method of claim 25, wherein the plurality of fields are configured to receive at least one of the following:

a combined federal and state ordinary income tax rate;

a combined federal and state long-term capital gains tax rate;

a first asset ticker symbol;

a date of purchase of the first asset;

a cost per share at purchase of the first asset;

a first load or commission paid at purchase of the first asset;

a number of shares to be sold of the first asset;

a target or estimated price per-share that the first asset will bring when sold; and

a second load or commission to be paid at the sale of the first asset.

27. The method of claim 25, wherein the financial effects include at least one of the following:

an estimated capital gain or loss,

an estimated net proceed from a sale of the first asset, and

an estimated capital gains tax due resulting from the sale of the first asset.

28. The method of claim 25, wherein the plurality of fields are configured to receive at least one of the following:

a combined federal and state ordinary income tax rate;

a combined federal and state long-term capital gains tax rate;

a first asset ticker symbol;

a date of purchase of the first asset;

a cost per share at purchase of the first asset;

a first load or commission paid at purchase of the first asset;

a number of shares to be sold of the first asset;

a target or estimated price per-share that the first asset will bring when sold;

a second load or commission to be paid at the sale of the first asset;

an anticipated rate of return on the first asset;

a second asset ticker symbol;

an amount to invest of the second asset;

a third load or commission to be paid at purchase for the second asset;

a second anticipated rate of return on the second asset; and

an expected number of years that either the first or the second asset will be held.

29. The method of claim 25, wherein the financial effects further include a holding time period for holding the second asset so that the second asset will have a value that would be equal to the value for the first asset if the first asset were not sold.

30. The method of claim 25, wherein the third sequence of one or more web pages displaying the financial effects of holding or selling the first asset includes links to view underlying calculation details.

31. The method of claim 25, further comprising displaying the first sequence of one or more web pages, second sequence of one or more web pages, and third sequence of one or more web pages.