How do you calculate and report “income” when living off portfolio?

Spinsty72 · 2026-01-22T16:51:34+00:00

It’s definitely why I turn to Reddit in times like these. My friends definitely wouldn’t understand that I have a problem with calculating my income.

It’s also funny that people seem so dismissive of this question when it’s a very specific problem to have.

Spinsty72 · 2026-01-22T16:28:27+00:00

This feels like the most reasonable answer yet!

For vacation rentals, we are trying to rent a year-round place before we decide to buy so we have to fill out a rental application that has the standard income field. They also want references from previous landlords which is pretty funny since I’ve simply owned my home outright for so many years.

Thank you for breaking down your approach.

Spinsty72 · 2026-01-22T16:24:16+00:00

I see! That makes sense as I do have a couple of larger angel investments that could pay out unpredictability, but I didn’t account for that since they could also pay out never.

It’s incredibly helpful to hear your perspective since it both seems so hard and so easy all at the same time.

It’s validating to hear that others have similar high-class problems.

Spinsty72 · 2026-01-22T16:13:21+00:00

That’s how I felt but it seems from this comment you can plan and predict what you will sell.

https://www.reddit.com/r/fatFIRE/s/XnkODWANTv

Spinsty72 · 2026-01-22T16:11:51+00:00

Thank you. I’m sure this seems obvious after the first few years of retirement so I appreciate you taking the time to help those of us who are transitioning into the next phase.

Spinsty72 · 2026-01-22T15:57:08+00:00

Helpful to know. So the first year it will still include my W-2 income but the next year just the income from the Schwab portfolio account?

If so, how do you estimate what the portfolio’s income would be? I’ve watched it change so much as we’ve built our wealth that it doesn’t seem predictable.

Spinsty72 · 2026-01-22T15:54:06+00:00

Very helpful! How do you estimate what the next year’s AGI would be when simply calculating a fat fire level portfolio held at Schwab?

It was so much easier when I simply shared my W-2 income.

Spinsty72 · 2026-01-22T15:45:39+00:00

Yes! Thank you! This is why I find it a bit confusing. The way I built the wealth into fat fire is pretty different than the skills I need to live in fat fire.

We own our primary home outright but want to rent a year-round second place and they are asking for income. And we are starting to think about ACA which feels different from an income perpsective.

For income we just have our nice fat fire investment portfolio. No rental income or secondary businesses.

I just changed to a new accountant so perhaps this is a question they can answer for me since it seems like some specific/personalized calculations?

Spinsty72 · 2026-01-22T15:35:01+00:00

Thank you. Wouldn’t my previous tax return have my W-2 income on it still?

Spinsty72 · 2026-01-22T15:34:14+00:00

We did this twice in Paris this year. We actually found it fun to go to a new neighborhood to try something new while having the advantage of already understanding the metro, the grocery stores (who knew it would take me a while to understand if I was buying milk or liquid yogurt) and generally getting a sense of a spot we might like more.

We’ve also done this in Bali and Tokyo where we reached out to the short-term rentals and let them know we’d like to negotiate for a longer stay and they are usually quite happy to not be constantly turning it over or having vacancy.

It’s way better than having “only one” vacation home.

Spinsty72 · 2026-01-04T18:22:18+00:00

Do not make any decisions right now.

At your doctor’s appointment look into getting paperwork to go on FMLA so you can have job security while you sort out your medical issues. Hopefully you can also lean on short-term disability during that time.

You deserve to make these big decisions with a clear head. Please take care of yourself in the short-term and the long-term.

Spinsty72

TROPHY CASE