Tax considerations vs IRR Targets

by a searcher from Stanford University - Graduate School of Business

Jan 19,2023

Hi all - trying to understand whether for modeling purposes taxes should be considered in modeling IRR or not. Are the investor IRR targets of 25-35% for the traditional or self-funded models pre-tax of post-tax? I've seen both uses. Thanks!

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searcher from University of Utah

^Searchfunder member‌, Thanks for the heads up on this one. Unfortunately, this is well above my head. I'm just getting started and have a long way to go before I understand all of this. Keep 'em comin' though!

01/23/2023 | like reply | 0 likes

investor from Western Washington University

IRR's should be calculated on a pre-tax basis, as everyone's tax situation is different. So yes, tax distributions would count towards the IRR, IMO.

01/20/2023 | like reply | 1 like

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