Example of answer using ChatGPT: In ProjectionLab, the Starting Cost Basis refers to the original value of your investment when calculating potential capital gains taxes. Essentially, it’s the total amount of money you initially invested in an asset, including the purchase price and associated fees. This value is important for determining the taxable gains when you sell the asset later at a higher price.

For example:

If you purchased a stock for $10,000 (including fees), your Starting Cost Basis would be $10,000. If you sell it later for $15,000, your taxable gain is $15,000 - $10,000 = $5,000. Why it’s used in ProjectionLab: ProjectionLab includes Starting Cost Basis in scenarios where you simulate selling investments or withdrawing from taxable accounts. It helps estimate:

Capital gains taxes: If you specify the cost basis, ProjectionLab can calculate how much of the growth in your investment is subject to taxes. Realized returns: To differentiate between growth due to appreciation versus initial investment. Make sure to set an accurate cost basis for any taxable account to ensure precise projections for your financial goals.

If you set the Starting Cost Basis to 0% in ProjectionLab, it means you’re telling the system that your entire investment is a taxable gain. Here’s why:

The cost basis represents the portion of your investment that is not taxable because it’s the amount you originally invested (you’ve already paid taxes on this money in most cases). If you set it to 0%, you’re essentially saying you invested nothing originally, so every dollar in the account is a gain. Example: Imagine your investment account is worth $100,000. If you set Starting Cost Basis to 0%, then the entire $100,000 is treated as a taxable gain. If your applicable capital gains tax rate is, say, 20%, ProjectionLab will estimate a tax of $20,000 upon withdrawal. If you don’t want taxable gains at all, you’d need to set the Starting Cost Basis to 100%, indicating the entire account value is your original investment, with no growth subject to taxes.

Key Points: 0% cost basis = full amount is taxable gain. 100% cost basis = no taxable gain. Choose the percentage based on the actual growth and original investments in your taxable account to make projections accurate.

I’ll +1 this, but also I would recommend that it use RAG to enable the LLM to analyze the user’s data and provide specific recommendations. This feature could be a premium option with an additional monthly fee. In a few years, all applications will have something like this, so might as well get ahead of the curve.