Forgive the ignorant question, but I am totally lost on HOW to calculate how much of the earnings I need to purge. Also, once I calculate that, does the penalty and taxes paid also count towards the amount needed to purge?
Hey Assalaamu Alykum @Atiffrq,
Welcome to the Community! So glad to have you with us. These are two great questions here. To get started on how to purify your holdings, take a look at our FAQ. Link below.
https://help.zoya.finance/en/articles/4189829-how-do-i-purify-my-investments
As for how to account for penalties and taxes, I’d be curious to hear what others have to say.
- @Farhan Link doesn’t work for me.
- @Atiffrq Thats a good question, actually I was also thinking about this the last years. Currently I am purifying the amount before tax because of my special situation that I get 250€ taxes back from the german state in the next year).
Questions would be if it should be applied better after tax. Is there any guidance by any standards? Technically it would make more sense to do it after tax IMO as the amount after tax is really the profit which you have.
In my special situation I would need to calculate this back in the sense of "I purified the amount after tax but as I am getting 250€ back next year, means that I should purify this amount afterwards accordingly, as it initially lowered my profit by 250€.