This refers to PRC 2024. I see PRC Online seems to have improved this capability (has a "real" vs "nominal" selection).
In PRC 2024, if I enter an Other Income Stream (non-taxable), I can see it decreasing in value in Tabular Projections -> Income, when the upper left button shows "Today's Dollars." I calculated the drop as a bit over 3% per year, which looks like inflation.
Yet in the definition of the Other Income Stream, it seems there is no corresponding COLA box to check for the stream. Am I correct here? For some inflation rates, I can offset it ("workaround") by using the Annual Percent increase box for the Stream. For 3% this works, and as long as inflation is rounded to the nearest 0.1%, it works. Are there unexpected consequences to using this workaround?
I have a set of discontinuous, non-taxable lump sums, then a set of continuous, non-taxable lump sums to model. That is why I'm using Other Income Streams. This is related to my other thread on trying to model a Donor Advised Fund on its own.
Thanks,
Dave
@dave You are correct that there is no COLA box to check in the Other Income streams; these streams are not automatically tied to inflation. Instead, there's a field where you can directly specify the annual increase %. If inflation is 3% and you enter 3% annual increase, the corresponding Other Income stream will increase at 3% in terms of future $ and will be constant in terms of today's $, as I think you've discovered. The consequence of doing it this way is that you will have to manually modify the annual % increase of these streams if you do what-if exercises with inflation rate (if they're actually tied to inflation).
Stuart
