Incorporate ATRS after-tax results to drive decision-making discussions with your clients. Cross-referencing tax transactions with federal, state, and local tax details, the integration delivers a view of portfolio results after taxes through a suite of attributes and Addepar reporting templates.
Last updated: 02-17-2023
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Provider Assisted Setup
A member of the integration partner’s support team will work with you to install, configure and test this integration. To get started, contact your representative at the partner firm for assistance.View Configuration Guide
Connect ATRS to Addepar
Create an API key in Addepar, and then connect the integration through ATRS’ website.
Contact ATRS to complete setup
Discuss your reporting goals and provide your client tax rates, and ATRS will set up the integration in Addepar, including a suite of custom attributes and section templates to help you get started.
On what date are tax transactions recorded?
Tax expenses or refunds occur on the date of the taxable event within the ATRS system. Although this may not correspond to the date of payment the provided transaction date most accurately reflects the after tax performance of the investment.
How does ATRS determine qualified dividends (QD) vs. non-qualified dividends (NQD)?
Qualified and non-qualified dividends are determined based on a client-level assumption. By default, the integration will assume dividends are split 80/20 for each client- 80% qualified and 20% non-qualified. During the setup process, you can change this assumption for any client. Note that this assumption only applies to taxable entities.
How does ATRS handle taxation of bond separate accounts and mutual funds?
Bond interest payments are classified as taxable and non-taxable. Federal, state, and local taxes are applied to taxable interest payments, and are based on the clients’ tax rates, which are defined in Addepar. Taxability of an interest payment is determined at the account-level for separate accounts and at the investment-level for ETFs and Mutual Funds.
How are federal, state, and local tax rates defined for each client?
Federal, state, local, and even collectible tax rates are defined in Addepar for each client. When a transaction occurs, these rates are applied (not on a graduated scale). Clients tend to utilize the highest marginal tax rates for reporting, but ATRS can flexibly define any rate for use. Talk with ATRS to learn more.
Are tax rates constant or do they vary?
ATRS operates with time-varying (calendar year) tax rates defined at the client level. Annual changes do not overwrite the previous year's tax rates. Once historical analysis is complete, historical rates are meant to be constant. Changing them retrospectively will require a project. Consult ATRS before changing historical rates.
How are short term vs long term unrealized attributes assigned to value based assets?
Short-term and long-term unrealized exposures are determined based on an investment solution-level assumption. By default, the integration will assume Private Equity has 10% short-term and 90% long-term unrealized exposures, and Hedge Funds have 50% short-term and 50% long-term unrealized exposures. During the setup process, you can change this assumption for any client.
How are limited partner (LP) distributions characterized for tax purposes?
When an LP distribution is recorded in Addepar, it can be characterized as capital gain, interest, dividend, return of capital, and more. Based on that characterization, ATRS applies the appropriate tax transaction.
How does ATRS attempt to capture the actual expenses of mutual funds and ETFs, and management and incentive fees of LPs?
ATRS uses custom attributes and Morningstar expense ratios to estimate the underlying costs of mutual funds and ETFs. It uses custom attributes and client-provided data to estimate the underlying costs of LPs. It should be noted that LP incentive fees are only calculated if there's a percentage (%) of profit interest above the highwater mark, and hurdle rates are not considered in the calculation.
How are taxes calculated on dividends of American Depositary Receipts (ADRs) in Addepar?
Most commonly, ADR dividend transactions appear in Addepar as either a single transaction, providing the dividend gross of a tax withholding, or as two transactions, providing the dividend gross of a tax withholding and the amount of that withholding. Because of the inconsistent handling of these transactions by custodians, ATRS will work with you to determine how dividend-related tax transactions should appear in Addepar during the setup process.
- After-tax report template walkthrough
- Creating proposals based on after-tax data
- Incorporating after-tax details into existing reports
- Disclaimer: This general information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice, and is not intended to be construed as tax advice. This information cannot be used for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions. Where specific advice is necessary or appropriate, ATRS recommends consulting with a qualified tax professional, CPA, financial planner, or investment manager.