Method and system for calculating correct income on a security using undistributed income - Patents.com

Abstract

A system for calculating correct income, the system including a server configured to obtain user data and a system database operatively connected to the server, the server further configured to use the undistributed income to calculate, using a formula, a correct income of a security at its first distribution after purchase of the security if the security is still owned at the end of the first payment period after purchase, using one or more of the obtained user data, security data, and distribution data.

Description

[Technical field]

[0001] CROSS-REFERENCE TO RELATED APPLICATIONS This application claims the benefit of priority to U.S. Provisional Patent Application No. 63 / 144,450, filed February 1, 2021, entitled "Method and System for Computing Per-Share Distributable Income of a Security," and U.S. Provisional Patent Application No. 63 / 214,150, filed June 23, 2021, entitled "Method and System for Computing Investment Risk Associated with Purchasing and Selling Income-Producing Securities," the disclosures of which are incorporated herein by reference. [Background technology]

[0002] This application contains subject matter related to the subject matter of the following applications, which are assigned to the same assignee as this application: The concurrently filed application by Boydell et al., entitled "METHOD AND SYSTEM FOR COMPUTING HIDDEN INVESTMENT COST DISCLOSABLE TO PURCHASERS AND SELLERS OF INCOME-PRODUCING SECURITIES," is hereby incorporated by reference in its entirety. Summary of the Invention

[0003] DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS An embodiment of the present invention provides a method and system for calculating the true income of a security using undistributed income.

[0004] 1. A system for calculating a user's correct income on a first distribution received after a purchase of a security using undistributed income, comprising: a server configured to control the system, the server further configured to calculate the user's correct income on a first distribution received after a purchase of a security using the undistributed income, the server further configured to obtain user data usable by the system, the user data including user purchase data related to a purchase of a security by the user, the user data further including information regarding whether the security is still owned at the end of a first payment period after the purchase of the security; and a system database operatively connected to the server, the system database including one or more of securities data usable by the system and distribution data usable by the system, the server further configured to calculate the user's correct income on a security on a first distribution received after a purchase of the security using the undistributed income and using the obtained user data, securities data, and distribution data, using the following formula:

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[0005] 1. A method for calculating a user's correct income on a first distribution received after a purchase of a security using undistributed income, comprising: a system comprising a server configured to control the system, the server further configured to calculate the user's correct income on a first distribution received after a purchase of a security using the undistributed income; the server further configured to obtain user data usable by the system, the user data including user purchase data related to a purchase of the security by the user, the user data further including information regarding whether the security is still owned at the end of a first payment period after the purchase of the security; the system further comprising a system database operatively connected to the server, the system database including one or more of securities data usable by the system and distribution data usable by the system, and obtaining the user data by the server; calculating by the server using the undistributed income and using the obtained user data, securities data, and distribution data the correct income of the user's security on the first distribution received after a purchase of the security if the security is still owned at the end of a first payment period after the purchase using the following formula:

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[0006] A system for calculating a user's correct income on a first distribution received after a purchase of a security using undistributed income, comprising: a server configured to control the system, the server further configured to calculate the user's correct income on a first distribution received after a purchase of a security using the undistributed income, the server further configured to obtain user data usable by the system, the user data including user purchase data relating to purchases of securities by the user, the user data further including information regarding whether the security is still owned at the end of a first payment period after the purchase of the security; and a system database operatively connected to the server, the system database including both a securities database and a distribution database, the securities database including securities data, the securities data including a list of all income producing securities in a target taxing jurisdiction, and further including a tag identifying the security type for which the securities data is processed, the system database including a relational database service, the distribution database including distribution data relating to securities distributions, and the distribution database including historical securities. a system database further comprising: a user device operated by a user, the user device operatively connected to a server, the server communicating with the user device via one or more of a network connection, a cloud, and a wired connection, the server comprising a login module suitable for use by the user device to log in to the server, the server further comprising a user interface suitable for use by the user device to interface with the server after successful login to the server, the server obtaining the user data from the user device via the user interface, the server being further configured to: calculate, using the undistributed income and using the obtained user data, securities data, and distribution data, a correct income for the user's securities at the first distribution after purchase of the securities if the securities are still owned at the end of the first payment period after purchase, using the following formula:

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[0007] The drawings depict various embodiments for purposes of illustration only. Those skilled in the art will readily recognize from the following description that alternative embodiments of the structures and methods shown herein may be used without departing from the principles described herein. [Brief description of the drawings]

[0008] [Figure 1] 1 illustrates an exemplary system for calculating a security's correct income using undistributed income. [Diagram 2] 1 illustrates an exemplary system for calculating a security's correct income using undistributed income. [Diagram 3] 1 is a graph showing the price of a security plotted against the days of the security's payment period, as calculated by a system for calculating the correct income of a security using undistributed income; [Figure 4A] 11 is a pair of bar graphs showing how the system creates a distribution index for a slightly more complex example. [Figure 4B] 11 is a pair of bar graphs showing how the system creates a distribution index for a slightly more complex example. [Diagram 5] 1 is a flowchart of a method for calculating a security's correct income using undistributed income. DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

[0009] While the present invention is susceptible of embodiment in many different forms, as illustrated in the drawings, one or more specific embodiments will be described in detail herein, with the understanding that the present disclosure is to be considered as an exemplification of the principles of the invention and is not intended to limit the invention to the specific embodiments shown and described. In the following description and in the several figures of the drawings, like reference numerals are used to describe the same, similar or corresponding parts of the several figures of the drawings.

[0010] An embodiment of the present invention solves the problem of the global stock market making investors who purchase securities pay taxes they should not owe. The global stock market uses a "last holder of record" system to distribute income to shareholders. In a "last holder of record" system, the last investor who owns shares on the last day of the payment period is entitled to the entire financial distribution, regardless of how long those shares were held. For example, if investor 1 holds shares of an income-producing security for a year and then sells those shares to investor 2 one day before the end of the payment period, investor 1 will not receive any of the upcoming distribution and investor 2 will receive the entire distribution, even though investor 2 only held the shares for one day.

[0011] The current "last owner of record" system includes in the price of the security the undistributed income of the security payable by the security to the stockholder of the security. Thus, an investor who purchases income-producing securities is purchasing two separate and very different interests in those securities. The majority of the investor's capital is used to purchase the actual securities. However, a smaller portion of the investor's capital is used to purchase the income already earned but not yet distributed that the security will distribute at a future date. The investor's capital used to purchase the ancillary interest in the undistributed income of the security is refunded to the investor as a full distribution. However, this refund of the undistributed income of the security should not be income. It amounts to a refund of a portion of the investor's initial capital and should be excluded from taxation because no income was earned. This is the problem with the current "last owner of record" system.

[0012] For example, if an investor purchases a security for $100 per share and a dividend of $2.00 is paid the next day, the price of the security falls from $100 per share to $98.00 per share when the dividend is paid, and the investor receives a dividend of $2.00 per share. This may seem like a zero-sum game because the investor has lost $2.00 in stock value and gained a $2.00 dividend. However, in this scenario, the investor will have a loss because the investor will have to pay tax on the $2.00 dividend that the investor receives. Assuming a 50% tax rate, the investor will be taxed $1.00, leaving a net investment of $99.00. The investor has lost 1% of their capital in less than 24 hours.

[0013] The reason this investor experienced a loss is because when the dividends they purchased were returned, the investor was taxed on the return of capital. Return of capital should not be taxable. Embodiments of the present invention provide a method and system to correct this deficiency in existing systems.

[0014] Embodiments of the present invention determine the amount of distributions that represent a return of the user's capital and therefore should be excluded from taxation. Embodiments of the present invention further determine the amount of distributions that are earned and therefore properly taxable.

[0015] The components of the system for calculating the correct income of a security using undistributed income may be built using a cloud-based system architecture. Alternatively or additionally, the system may be built using physical on-site components.

[0016] FIG. 1 illustrates an exemplary system 100 for calculating the correct income of a security using undistributed income. FIG. 1 illustrates a system 100 that can be constructed and operated using physical on-site components. Alternatively or additionally, the system 100 illustrated in FIG. 1 can also be constructed and operated using a cloud-based system architecture. Preferably, but not necessarily, FIG. 1 illustrates a system 100 suitable for use with physical on-site components. For example, in the case of a cloud-based system architecture, cloud-based systems include systems sold by Amazon Web Services (AWS)®, a subsidiary of Amazon.com (www.amazon.com)® of Seattle, Washington.

[0017] The system 100 comprises a server 110, which is configured to one or more of process data and control the system 100. The server 110 comprises computer code operable to process data. The system 100 further comprises a user device 120 operated by a user, also known as a user (not shown), which is operatively connected to the server 110. For example, the user device 120 includes one or more of a desktop computer, a notebook computer, a tablet, a mobile phone, a smart watch, and another user device. The server 110 and the user device 120 are configured to communicate with each other. As shown, the system further comprises a network 125.

[0018] For example, the server 110 communicates with the user device 120 via a network connection using one or more of a network 125, a cloud, a wired connection, and another connection. The network comprises a server-device network connection 125A that operatively connects the server 110 and the user device 120. As shown, the server 110 communicates with the user device 120 via the server-device network connection 125A. The network 125 includes one or more of a wired network, a wireless network, and another network. The network 125 preferably includes a wired network, but does not necessarily have to.

[0019] The server 110 comprises a login module (not shown) suitable for use by the user device 120 to log in to the server 110. The system 100 further comprises a user interface (not shown) suitable for use by the user device 120 to interface with the server 110 after successful login to the server 110. Through a server-device network connection 125A connecting the server 110 to the user device 120, a user (not shown) uses the user device 120 to access a login module provided by the server 110. For example, the server-device network connection 125A can include an Internet connection, while the remainder of the network 125 includes a wired network. Using the login module, the user device 120 accesses the server 110 through the user interface. Using the user device 120 through the user interface, the user (not shown) uploads user data 127. The user interface transmits the user data 127 to the server 110 through the server-device network connection 125A.

[0020] The system 100 further comprises a system database 130, which is operatively connected to the server 110 via a server-database network connection 125B. The system database 130 includes one or more of a securities database 135 and a distribution database 140. Preferably, but not necessarily, the system database 130 includes both the securities database 135 and the distribution database 140. Alternatively or additionally, one or more of the securities database 135 and the distribution database 140 are located outside the system database 130. For example, if both the securities database 135 and the distribution database 140 are not included in the system database 130, an operational network connection (not shown) connects the securities database 135 to the server 110 and a second operational network connection (not shown) connects the distribution database 140 to the server 110.

[0021] The securities database 135 includes a master list of securities including security names, security ticker symbols, and other relevant information. Preferably, but not necessarily, the securities database 135 includes securities data, which includes a list of securities that generate income in a tax jurisdiction of interest of interest. Most preferably, but not necessarily, the securities database 135 includes a list of all income-generating securities in a tax jurisdiction of interest of interest. For example, the securities database 135 further includes a security tag that identifies the security type being processed. The securities database 135 uses the security tag to indicate what type of security each security is. For example, the security tag indicates whether the security is a stock or an investment fund. For example, the security tag identifies how securities income is taxed. For example, the security tag further indicates whether the security is taxable in the tax jurisdiction of interest. Preferably, but not necessarily, the securities database 135 includes a relational database service.

[0022] The distribution database 140 is configured to one or more of receive distribution data from the server 110 usable by the system 100 regarding the securities distributions and store the distribution data. For example, the distribution data includes an accounting of all distributions made from the securities in the securities database 135. The distribution database 140 includes one or more of a physical distribution database and a cloud-based distribution database. The distribution database 140 is configured to one or more of receive data from the server 110, store data usable by the server 110, and export data to the server 110 via the server-database network connection 125B. The distribution database 140 is preferably, but not necessarily, configured to receive data from the server 110, store data usable by the server 110, receive requests for required data from the server 110, and export the required data to the server 110.

[0023] Preferably, but not necessarily, the distribution database 140 further includes historical securities data. Preferably, but not necessarily, the historical securities data includes data regarding the history of securities distributions. The distribution database 140 may obtain the transaction data from an external data source. For example, the external data source may include one or more of Bloomberg (www.bloomberg.com)® of New York, FactSet (www.factset.com) of Norwalk, Connecticut, Thomson Reuters Corporation (www.thomsonreuters.com)® of Toronto, Ontario, Canada, and any other external data source.

[0024] The system 100 further comprises a storage 150 configured to store data. The network 125 includes one or more of a server-device network connection 125A operatively connecting the server 110 and the user device 120, a server-database network connection 125B operatively connecting the server 110 and the system database 130, and a server-service network connection 125C operatively connecting the server 110 and the storage 150. Preferably, but not necessarily, as shown, the network 125 comprises a server-device network connection 125A operatively connecting the server 110 and the user device 120, a server-database network connection 125B operatively connecting the server 110 and the system database 130, and a server-storage network connection 125C operatively connecting the server 110 and the storage 150.

[0025] The server 110 obtains the user data 127 from the user device 120 via the server-device network connection 125A. Through the server-database network connection 125B, the server accesses the system database 130 to obtain the securities information required to calculate the undistributed income. Using the securities information obtained thereby and the method for calculating the undistributed income, the server 110 processes the user data 127 and calculates the undistributed income to generate the calculation data 154. For example, the calculation data 154 includes the calculated correct income. The server 110 transmits one or more of the user data 127 and the calculation data 154 to the storage 150 via the server-storage network connection 125C that connects the server 110 to the storage 150. Although not necessarily required, the server 110 preferably transmits both the user data 127 and the calculation data 154 to the storage 150 via the server-storage network connection 125C. The storage 150 stores one or more of the user data 127, the calculated correct income, the undistributed income, and the calculated distribution index. Storage 150 also stores one or more of computational data 154, log data 156, profile data 158, and other data 160. Log data 156 includes records of events that occur within system 100, including user logins, user uploads of user data, transmissions of data over server-database network connection 125B between server 110 and system database 130, transmissions of data over server-storage network connection 125B between server 110 and storage 150, user requests for computational data 154, and any other system events. Profile data 158 includes profile information submitted by a user when creating a user profile. Profile information includes one or more of a profile picture, a username, a name, an address, a telephone number, a fax number, an electronic mail (email) address, a social media handle, and other profile information. For example, a profile picture includes one or more of a photo of the user and other photos.Other data 160 includes one or more of data related to system 100, data used to generate metrics related to system 100, dashboards configured to measure data processed by users, and further other data. The user using the user device 120 and one or more of the intermediaries (not shown) authorized by the user can request to receive calculation data 154 including the calculated correct income. The server 110 then exports the calculation data 154 including the calculated correct income back to the user device 120 and one or more of the intermediaries authorized by the user. Preferably, but not necessarily, the server 110 is configured to export one or more of the calculated correct income and the undistributed income to one or more of the user device and the intermediaries. Most preferably, but not necessarily, the server 110 is configured to export both the calculated correct income and the undistributed income to one or more of the user device and the intermediaries.

[0026] For example, the intermediary may include one or more of an accountant, a tax advisor, a broker-dealer, and a securities depository. The network further comprises a server-intermediary network connection operatively connecting the server 110 and the intermediary.

[0027] Using the user device 120 via server-device network connection 125A, the user can request computational data 154. Alternatively or additionally, the server 110 instructs the storage 150 to transmit the requested computational data 154 to the user device 120 via server-storage network connection 125C. The server 110 then transmits the requested computational data 154 via the user device 120 via server-device network connection 125A to one or more of the user (not shown) and an intermediary (not shown) designated by the user.

[0028] Figure 2 illustrates an exemplary system 200 for calculating a security's true income using undistributed income. Figure 2 illustrates a system 200 that is built and operated using a cloud-based system architecture. For example, cloud-based systems include systems sold by Amazon Web Services (AWS), a subsidiary of Amazon.com (www.amazon.com) of Seattle, Washington.

[0029] The system 200 comprises a virtual private cloud 205. The virtual private cloud 205 comprises system components for implementing the method and system for calculating the correct income of a security using undistributed income. The virtual private cloud 205 comprises servers 210A-210B. As shown, the virtual private cloud 205 comprises two servers, a first server 210A and a second server 210B. The servers 210A-210B are configured to one or more of process data and control the virtual private cloud 205. For example, one or more of the servers include an Amazon Elastic Cloud Compute (EC2)® server operated by Amazon Web Services (AWS)®, a subsidiary of Amazon.com (www.amazon.com)®, Seattle, Washington. The system optionally further includes private subnets 215A-215B. As shown, the virtual private cloud 205 includes two private subnets, a first private subnet 215A and a second private subnet 215B. At least one of the servers 210A-210B may optionally be included in a private subnet 215A-215B. As shown, the first private subnet 215A includes the first server 210A, and the second private subnet 215B includes the second server 210B.

[0030] Each of the servers 210A-210B comprises computer code operable to process data. The system 200 further comprises user devices 220 operated by users (not shown), also known as users, which are operatively connected to the servers 210A-210B. For example, the user devices 220 include one or more of a desktop computer, a notebook computer, a tablet, a mobile phone, a smart watch, and other user devices. The servers 210A-210B and the user devices 220 are configured to communicate with each other. As shown, the system further comprises a network 226 configured to connect the components of the virtual private cloud 205. For example, the network 226 is one or more of a wired network, a wireless network, and other networks. The network 226 preferably, but not necessarily, includes one or more of a wired network and the Internet.

[0031] For example, the servers 210A-210B communicate with the user device 220 via one or more of a network connection using the Internet 226, a cloud, a wired connection, and other connections. As shown, the user device 220 is operatively connected to each of the servers 210A-210B. In FIG. 2, unlike FIG. 1, the operative connection between the user device 220 and the servers 210A-210B passes through multiple other components.

[0032] The private cloud 205 further includes public subnets 227A-227B. The private cloud 205 further includes firewalls 228A-228B. As shown, the private cloud 205 further includes a first public subnet 227A, a second private subnet 227B, a first firewall 228A, a second firewall 228B, an elastic load balancer 229, and an Internet gateway 230. The elastic load balancer 229 is configured to launch an appropriate number of servers 210A-210B as needed to process data being uploaded via the user devices 220. The first public subnet 227A includes a first firewall 228A. The second public subnet 227B includes a second firewall 228B. For example, the first firewall 228A includes a Network Address Translation (NAT) gateway 228A operated by Amazon Web Services (AWS), a subsidiary of Amazon.com (www.amazon.com) of Seattle, Washington. For example, the second firewall 228B includes a NAT gateway 228B operated by Amazon Web Services (AWS), a subsidiary of Amazon.com (www.amazon.com) of Seattle, Washington. An Internet gateway 230 is operatively connected to the first public subnet 227A. The Internet gateway 230 is operatively connected to the second public subnet 227B. The Internet gateway 230 is also operatively connected to an elastic load balancer 229.

[0033] As shown, the first server 210A communicates with the user device 220 via the highlighted path, which first passes through the first private subnet 215A that includes the first server 210A, then via the first private subnet-first public subnet connection 235 to the first public subnet 227A that includes the first firewall 228A, then via the first public subnet-Internet gateway connection 240 to the Internet gateway 230, and then via the Internet 226 to the user device 220 via the Internet gateway-device connection 245.

[0034] The Internet gateway 230 provides one or more of a login module 250 suitable for use by the servers 210A-210B to log into the servers 210A-210B, and a user interface 255 suitable for use by the Internet gateway 230 to provide an interface between the virtual private cloud 205 and the user device 220 after successful login to the servers 210A-210B. Through the user interface 255 and the Internet gateway 230, a user (not shown) uploads user data 260 to one or more of the servers 210A-210B.

[0035] The system 200 further comprises a system database 270, which is operatively connected to the first server 210A via a first server-database network connection 272A, and which is operatively connected to the second server 210B via a second server-database network connection 272B. The system database 270 includes one or more of a securities database 275 and a distribution database 280. Preferably, but not necessarily, the system database 270 includes both the securities database 275 and the distribution database 280. Alternatively or additionally, one or more of the securities database 275 and the distribution database 280 are located outside the system database 270. For example, if both the securities database 275 and the distribution database 280 are not included in the system database 270, an operational network connection (not shown) connects the securities database 275 to the servers 210A-210B, and a second operational network connection (not shown) connects the distribution database to the servers 210A-210B.

[0036] The securities database 275 includes a master list of securities including security names, security ticker symbols, and other relevant information. Preferably, but not necessarily, the securities database 275 includes securities data, which includes a list of income producing securities in the subject taxing jurisdiction. Most preferably, but not necessarily, the securities database 275 includes a list of all income producing securities in the subject taxing jurisdiction. The securities database 275 uses security tags to indicate what type of security each security is. For example, the security tag indicates whether the security includes a stock or an investment fund. For example, the security tag identifies how securities income is taxed. For example, the security tag further indicates whether the security is taxable in the subject jurisdiction. Preferably, but not necessarily, the securities database 275 includes a relational database service.

[0037] The distribution database 280 is configured to one or more of receive distribution data usable by the system 200 regarding securities distributions from the servers 210A-210B and store the distribution data. For example, the distribution data includes an accounting of all distributions made from the securities in the securities database 275. The distribution database 280 includes one or more of a physical distribution database and a cloud-based distribution database. The distribution database 280 is configured to one or more of receive data from the servers 210A-210B, store data usable by the servers 210A-210B, and export data to the servers 210A-210B via the server-database network connections 272A-272B. The distribution database 280 is preferably, but not necessarily, configured to receive data from the servers 210A-210B, store data usable by the servers 210A-210B, receive requests for required data from the servers 210A-210B, and export the required data to the servers 210A-210B.

[0038] Preferably, but not necessarily, the distribution database 280 further includes historical securities data. Preferably, but not necessarily, the historical securities data includes data regarding the history of securities distributions. The distribution database 280 may obtain the transaction data from an external data source. For example, the external data source may include one or more of Bloomberg (www.bloomberg.com)® of New York, FactSet (www.factset.com) of Norwalk, Connecticut, Thomson Reuters Corporation (www.thomsonreuters.com)® of Toronto, Ontario, Canada, and any other external data source.

[0039] System 200 further includes storage 285 configured to store data. For example, storage 285 may include an S3 storage device operated by Amazon Web Services (AWS), a subsidiary of Amazon.com (www.amazon.com), located in Seattle, Washington.

[0040] The servers 210A-210B acquire the user data 260 from the user device 220. For example, the servers 210A-210B acquire the user data 260 via the user interface 255. The servers 210A-210B access the system database 270 to acquire securities information necessary for calculating the undistributed income. Using the securities information acquired thereby and the method for calculating the undistributed income, the servers 210A-210B process the user data 260 and generate the calculation data 287 by calculating the undistributed income. For example, the calculation data 287 includes the calculated correct income. The servers 210A-210B transmit one or more of the user data 260 and the calculation data 287 to the storage 285 via the respective server-storage network connections 288A-288B connecting the respective servers 210A-210B to the storage 285. Preferably, but not necessarily, the servers 210A-210B transmit both the user data 260 and the calculation data 287 to the storage 285 via the respective server-storage network connections 288A-288B. The storage 285 stores the user data 260. The storage 285 also stores one or more of the calculation data 287, the log data 289, the profile data 290, and other data 291. The log data 289 includes records of events that take place within the system 200, including user logins, user uploads of user data, transmissions of data between the respective servers 210A-210B and the system database 270 via the respective server-database network connections 272A-272B, transmissions of data between the respective servers 210A-210B and the storage 285 via the respective server-storage network connections 288A-288B, user requests for the calculation data 260, and any other system events. The profile data 290 includes profile information submitted by a user when creating a user profile. The profile information may include one or more of a profile picture, a username, a name, an address, a phone number, a fax number, an electronic mail (email) address, a social media handle, and other profile information.For example, the profile picture includes one or more of a picture of the user and other pictures. Other data 291 includes one or more of data related to system 200, data used to generate metrics related to system 200, dashboards configured to measure data processed by the user, and further other data.

[0041] The user using the servers 210A-210B and one or more of the intermediaries (not shown) authorized by the user can request to receive calculation data 287 including the calculated correct income. One or more of the servers 210A-210B then exports the calculation data 287 including the calculated correct income back to the user device 220 and one or more of the intermediaries authorized by the user. For example, the intermediaries include one or more of an accountant, a tax advisor, a broker-dealer, and a securities depository.

[0042] Using the servers 210A-210B, a user can request computational data 287. Alternatively or additionally, in response to a user request, the servers 210A-210B instruct the storage 285 to transmit the requested computational data 287 to the user device 220.

[0043] The system includes multiple components, such as one or more of electronic components, hardware components, and computer software components. Some such components may be combined or divided within the system. An exemplary component of the system includes a set and / or series of computer instructions written or implemented in any of a number of programming languages, as will be appreciated by those skilled in the art.

[0044] The system in one example uses one or more computer-readable signal-bearing media. The computer-readable signal-bearing media stores software, firmware, and / or assembly language for executing one or more portions of one or more implementations of the present invention. The computer-readable signal-bearing media for the system in one example includes one or more of magnetic, electrical, optical, biological, and atomic data storage media. For example, the computer-readable signal-bearing media includes one or more of floppy disks, magnetic tapes, CD-ROMs, DVD-ROMs, hard disk drives, downloadable files, "cloud" executable files, electronic memory, and another computer-readable signal-bearing media.

[0045] For purposes of this application, undistributed income is equal to the return of capital that a user can claim as a tax deduction when purchasing income-producing securities. Undistributed income is equal to the undistributed income per share purchased multiplied by the number of shares purchased. In the case of a purchase, the undistributed income is purchased by the user and then returned to the user when the distributions are paid. The system requires that the purchased shares are held at the end of the payment period. For example, a user can claim the return of capital as a tax deduction. The system calculates undistributed income using a distribution index.

[0046] Therefore, the user's correct income on the first distribution received after purchasing the security is determined by the following formula: (1) Correct Income = (Dividends Received - Undistributed Income) Where the dividends received are the dividends received by the user, and the undistributed income is the undistributed income per share purchased multiplied by the number of shares purchased. The undistributed income represents a return of capital to the user. This return of capital should not be subject to taxation. If the user does not claim a tax credit for the return of capital in the tax return, the user will pay tax on income that he did not earn, causing the user who purchased the securities to overpay tax. In the case of a securities purchase, the server calculates the undistributed income. The server then sends one or more of the calculated correct income and the calculated undistributed income to the storage. Preferably, but not necessarily, the server sends both the calculated correct income and the calculated undistributed income to the storage. The undistributed income is used to adjust the user's tax return to calculate the correct income. The correct income includes the undistributed income.

[0047] For purposes of this application, the distribution index, also known as the "distribution index per share," includes one or more of an estimate of the undistributed income of a security per share for an interest payment period and an exact value of the undistributed income of a security per share for an interest payment period. According to an embodiment of the present invention, the distribution index can be divided by the price of the security to calculate the undistributed income percentage for an interest payment period. In the case of an investment fund, the distribution index includes a variable that changes at least once within a payment period. Preferably, but not necessarily, in the case of an investment fund, the distribution index includes a variable that changes daily between payment periods. Thus, in the case of a purchase, the distribution index multiplied by the number of shares represents the income that the owner of the security purchased, an income that the system deducts from the income distribution. Thus, our system allows the owner of the security to avoid being unfairly taxed by allowing the user to claim a capital refund on the portion of the undistributed income that was purchased and then refunded to the user. The capital refund should be deducted from the user's taxes. The claim of the capital refund reduces the user's income by the amount of the refund claimed.

[0048] The distribution data includes information usable to calculate a distribution index for the security. According to an embodiment of the present invention, the system generates a database of distribution data for the security. According to a further embodiment of the present invention, the system generates a plurality of databases for the data, at least one of the databases includes financial distribution information usable to calculate a distribution index for the security. Preferably, but not necessarily, each of the databases including financial distribution information is usable to calculate a distribution index for the security. The financial distribution information usable to calculate a distribution index can be obtained from financial data sources such as one or more of Bloomberg®, FactSet, and Refinitiv®. The financial distribution information includes one or more of the following: the ex-dividend date of the security, the dividend announcement date, a CUSIP (Committee on Uniform Security Identification Procedures) identifier, other unique security identifier, a ticker symbol, a distribution payment frequency, a custom security tag, payment period information for the security, the periodic total distribution per share for the security, the type of distribution for the security, the holding period requirement for the security, and information related to one or more of security income, security profit, security type, and tax information related to the distribution of the security. For example, holding period requirements include holding period requirements for preferential taxation of securities in the target jurisdiction.

[0049] According to a further embodiment of the present invention, following the calculation of the distribution index, the distribution index may be stored in a database. Alternatively or additionally, the distribution index may be calculated on demand. According to yet another embodiment of the present invention, alternatively or additionally, the distribution percentage may be stored in a database. According to yet another embodiment of the present invention, the system uses the distribution index to calculate the cumulative distribution income for the security for an interest period. For example, the interest period includes one or more of the interest dates included in the payment period, the interest times included in the payment period, and the time frame included in the payment period. Alternatively or additionally, the system calculates the distribution index in a single calculation.

[0050] According to another embodiment of the present invention, after the end of a payment period in which a distribution is declared by a security, the system obtains user data. For example, the user data includes one or more of an accounting of a security purchase or sale, a tax lot, an account number, a tax lot identification number, a long position identifier, a short position identifier, a ticker symbol, a tax cost, a tax basis, and a unique security identifier. For example, the security identifier includes a CUSIP identifier. For example, the user data includes one or more of a date of a security purchase or sale, a time of the security purchase or sale, and a number of shares purchased or sold. For example, preferably, but not necessarily, in the case of a purchase, the user data describes a purchase by the user during the payment period and that the user still owns the security purchased at the end of the payment period. For example, the system obtains one or more of a user's tax lot history and a user's trading history. Preferably, but not necessarily, after the end of a payment period in which a distribution is declared by a security, the system obtains an accounting of the days, hours, and number of shares purchased by the user during the payment period and still owned by the user at the end of the payment period. Preferably, but not necessarily, after the end of a payment period in which a distribution is declared by a security, the system further obtains the account number, tax lot, tax lot identification number, long position identifier, short position identifier, ticker symbol, tax cost, tax basis, and security identifier. Preferably, but not necessarily, after the end of a payment period in which a distribution is declared by a security, the system obtains, for all purchases and / or sales during the payment period, an accounting of the days, hours, and number of shares purchased by all users during the payment period and still owned by each user at the end of the payment period.Preferably, but not necessarily, after the end of a payment period in which a distribution is declared by a security, the system further obtains the account number, tax lot, tax lot identification number, long position identifier, short position identifier, ticker symbol, tax cost, tax basis, and security identifier, account number, tax lot identification number, long or short position identifier, tax cost, tax basis, and CUSIP or unique security identifier for all purchases and / or sales during the payment period. Preferably, but not necessarily, the system obtains information from one or more of the user, a broker for the user, a custodian for the broker, a transfer agent, a record-keeping institution, and another entity that holds user information.

[0051] According to another embodiment of the present invention, the system obtains information regarding one or more of eligible security purchases and security sales, where an eligible security purchase includes a security share purchased during an interest payment period, which security share is still owned at the end of the interest payment period.

[0052] Preferably, but not necessarily, the server obtains eligible securities purchase information for one or more of a plurality of securities, a plurality of users, and a plurality of payment periods. The server then processes the information regarding the eligible securities purchases. The server then calculates undistributed income from the eligible securities purchases.

[0053] For eligible purchases of securities occurring during the relevant payment period, the system will multiply the number of shares purchased by the Distribution Index at the time the shares are purchased.

[0054] Preferably, but not necessarily, for eligible security purchases occurring in the relevant payment period, the server multiplies the number of shares purchased by the distribution index at the time the shares were purchased. Preferably, but not necessarily, for each eligible security purchase occurring in the relevant payment period, the server multiplies the number of shares purchased by the distribution index at the time the shares were purchased. An eligible purchase of a security is defined as one that occurs during an interest payment period where the shares purchased are still owned at the end of the payment period. A purchase and subsequent sale of a security within the same payment period does not earn a distribution, so there are no distributions for which the system needs to make an adjustment.

[0055] The "last owner of record" system has no way to pay income to users who own income-producing securities and sell the securities before the distributions are paid. Under the current "last owner of record" system, in this case, the undistributed income accrues to the price of the security, pushing up the security price by an amount equal to the undistributed income. Thus, when the seller sells the security, he or she receives a pro rata share of the income in the form of a capital gain resulting from the price increase. However, in many taxing jurisdictions, distributed income is taxed at a lower rate than capital gains. This can cause the seller of the security to lose out on income due to poor tax rates.

[0056] The system uses the following formula to calculate the user's correct income when selling income-producing securities: (2) Correct income on securities = S*(D*(CQ)) where S=the number of shares the user wishes to sell, where D=the distribution index per share, C=the capital gains tax rate or maximum tax rate, and Q=the tax rate on qualified income or minimum tax rate.

[0057] Securities purchased and subsequently sold during the same payment period are subject to income reclassification if the holding period for the taxing jurisdiction in question is met, which allows the user to be taxed at a lower rate on the income. Securities purchased and then sold before the end of the payment period do not receive a distribution. Thus, the system does not claim a return of capital since no distribution was paid.

[0058] The aging percentage of a payment period consists of the amount of time that has elapsed from the beginning of the payment period to the date and time of the purchase or sale, divided by the total length of the payment period. For some security types, the aging percentage of a payment period may be equal to 1.00. For example, the dividend index of a company's issued stock, such as IBM (International Business Machines), may be equal to 1.00.

[0059] The server calculates the distribution index using the following formula:

number

[0060] Therefore, the formula for calculating the distribution index is expressed as follows:

number

[0061] The server generates a result equal to the amount of undistributed income purchased by the user, subject to reclassification for tax purposes, by multiplying the number of shares purchased by the distribution index. The purchased portion of the undistributed income is refunded to the user when distributions are paid, and is therefore subject to reclassification for tax purposes, allowing the user to avoid paying tax on the refund of their capital. Using embodiments of the present invention, the user only pays tax on what they earn.

[0062] The server calculates the undistributed income using the following formula:

number

[0063] Correct income is defined as income that should be correctly taxed. The server calculates correct income for purchases of income-producing securities using the following formula:

number

[0064] The server calculates the distribution index percentage per share, which represents the ratio of total distributions to the price of the security, using the following formula:

number

[0065] A single security may make one or more types of distributions. For example, a security may make at least two types of distributions. These multiple distributions issuable by a single security may have one or more of different payment periods and different distribution frequencies. For example, a security may distribute one or more of income, cash, short-term capital gains, long-term capital gains, special distributions, return of capital, and other distribution types. The terminology of the various types of distributions varies from country to country and from jurisdiction to jurisdiction. For example, the payment period for income distributions may be three months. For example, the payment period for long-term capital gains may be twelve months. For example, the payment period for short-term capital gains may be twelve months. The distribution frequency varies and is set by the security issuer. The server is configured to calculate a distribution index for each type of distribution made from the security. The server is configured to process all distribution types. The names and types of distributions may vary by tax jurisdiction. An embodiment of the present invention is configured to process any distribution type, regardless of the distribution name or tax jurisdiction.

[0066] For at least one distribution type, the server uses the distribution made according to the distribution type to calculate the correct income according to formula (6). Preferably, but not necessarily, for each distribution type, the server uses the distribution made for each distribution type to calculate the correct income according to formula (6). The server then transmits to the storage one or more of the calculated correct income for each distribution type and the calculated undistributed income for each distribution type. Preferably, but not necessarily, the server then transmits to the storage both the calculated correct income for each distribution type and the calculated undistributed income for each distribution type.

[0067] According to another embodiment of the present invention, the system calculates the true fair market value of a security by subtracting the distribution index value from the security's market value.

[0068] According to further embodiments of the present invention, the system may run in real time for one year after each security has paid its distribution. Alternatively or additionally, the system may run historically for any period or security whose database contains the relevant data necessary to construct a distribution index.

[0069] According to another embodiment of the present invention, the system may be used to amend a previously filed tax return.

[0070] According to a further embodiment of the present invention, the system may be configured to process the user's transactions in one or more of multiple countries and multiple taxing jurisdictions. According to yet another embodiment of the present invention, the system processes the user's transactions in multiple countries by mapping the income data to corresponding income tax categories on the user's tax return in the target country. Alternatively or additionally, the system processes the user's transactions in multiple taxing jurisdictions by mapping the income data to corresponding income tax categories on the user's tax return in the taxing jurisdiction. According to yet another embodiment of the present invention, the system generates a report regarding the user's correct income in multiple taxing jurisdictions. The system then stores the report in a storage.

[0071] According to another embodiment of the present invention, the system can generate reports that support the reclassification of income for tax purposes for securities. Preferably, but not necessarily, the system can generate reports that support the reclassification of income for tax purposes for each security. For example, the report can include one or more of the following data: the correct amount of income, the amount of earned income, the amount of the sale distribution income, the type of the sale distribution income, the amount of undistributed income, which may be one or more of reclassifiable and non-taxable, the amount of capital refund, the adjusted security basis of the tax lot processed, the adjusted security basis of the transaction processed, and any adjustments that need to be made to the user's tax return to ensure proper taxation.

[0072] The following table provides an example of how the system may allow a user to attempt to avoid losses as a result of dividends being included in the price of a security. [Table 1]

[0073] The user purchases shares of a security for $100.00 per share. The security pays a distribution of $2.00 the next day. The value of the security decreases by the amount of the distribution payable, so the security price falls from $100.00 to $98.00. The user receives a taxable distribution of $2.00. For example, if the distribution is taxable at a 40% tax rate, the after-tax distribution is worth $1.20. The after-tax value of the distribution plus the security equals $99.20. Thus, the user realized a negative refund of 80% in less than 24 hours. The user's income distribution is calculated as $2.00, but the $2.00 is appropriately reclassified as a refund of the user's capital. Because the user should not be taxed upon the refund of his invested capital, he should not experience a loss, which the user can document using the system.

[0074] Figure 3 is a graph showing the price of a security plotted against the days of the security's payment period. Figure 3 also shows the portion of the dividends purchased by the user and the portion of the dividends that are earned and therefore constitute correct income. The following table presents data regarding the user's investments in tabular form. [Table 2] FIG. 3 illustrates that the system can calculate the income of an income-producing security as it accumulates over the payment period. FIG. 3 illustrates a security that has a constant price over the 30-day payment period and accumulates $1.00 per share of undistributed income that constitutes the price. A user who purchases the security on the 18th day of the payment period purchases $0.60 of undistributed income per share. The user will then earn an additional $0.40 per share of income by the end of the payment period. On the ex-dividend date of the 30th day, when the distribution is paid to the user, the security falls by $1.00. The figure illustrates the difference between the undistributed income purchased and the income earned as calculated by the system. The system informs the user that only $0.40 per share may be taxed on the distributed income earned. Alternatively or additionally, the system reclassifies the distribution to reflect that only $0.40 per share of the $1.00 distribution is income earned.

[0075] 4A-4B are a pair of bar graphs illustrating how a distribution index may be created for a slightly more complex example. The following table presents data regarding users' investments in tabular form. [Table 3]

[0076] FIG. 4A shows the difference in tax paid under the prior art system and using the system to calculate actual income. FIG. 4B shows the difference in taxable income under the prior art system and using the system to calculate actual income. FIG. 4A-B show how using the system a user can avoid paying tax on a return of capital that should not be taxed. FIG. 4A-B show a situation where a purchaser makes two purchases of the same security on the 15th and 27th days. These figures show the results with the prior art system and the user's results with the system to calculate actual income. The security makes a distribution of $1.00 per share at the end of the payment period. The users purchase 1,000 shares on the 15th and 27th days. On the 15th day, both investors purchase $500 of undistributed income. On the 27th day, the users purchase $900 of undistributed income. Under the prior art "last owner of record" system, the users would have $1,000 of taxable distributed income per purchase, or $2,000 of total taxable distributed income. Using the system for calculating actual income, the user can deduct the $500 purchase distribution income from the first transaction and the $900 purchase distribution income from the second transaction for a total capital refund deduction of $1,400. Thus, the user's taxable income under the prior art system is $2,000 and the user's taxable income using the system for calculating actual income is $600.

[0077] Assuming a 40% tax rate, in the prior art system, the user pays $800 in tax. Using the system for calculating actual income, the user will incur a tax of $240. Figures 4A-4B show the difference in the user's paid tax and taxable income under the two systems, the prior art and the system for calculating actual income.

[0078] FIG. 5 is a flow chart of a method 500 for calculating a security's correct income using undistributed income.

[0079] The order of steps in method 500 is not constrained to the order shown in Figure 5 or set forth in the following description. Some of the steps may be performed in a different order without affecting the end result.

[0080] In step 510, using a system including a server configured to control the system, the server further configured to use the undistributed income to calculate a correct income for the user on the first distribution received after purchasing the security, the server further configured to obtain user data usable by the system, the user data including user purchase data related to a purchase of the security by the user, the user data further including information regarding whether the security is still owned at the end of the first payment period after purchasing the security, the system further including a system database operatively connected to the server, the system database including one or more of security data usable by the system and distribution data usable by the system, and the server obtains the user data. Block 510 then transfers control to block 520.

[0081] In step 520, the server uses the undistributed income to calculate, using one or more of the obtained user data, policy data, and distribution data, the correct income of the user's policy at the first distribution after purchase of the policy if the policy is still owned at the end of the first payment period after purchase, using the following formula:

number

[0082] The server sends one or more of the calculated correct income and the undistributed income to storage in step 530. Block 530 then ends the process.

[0083] Any logic or application described herein, including software or code, can be embodied in any non-transitory computer-readable medium for use by or in connection with an instruction execution system in a computer system or other system. In this sense, logic can include statements, including instructions and declarations, that can be fetched from a computer-readable medium and executed by an instruction execution system. In the context of the present disclosure, a computer-readable medium can be any medium that can contain, store, or maintain the logic or application described herein for use by or in connection with an instruction execution system. For example, a computer-readable medium may include one or more of a random access memory (RAM), a read-only memory (ROM), a hard disk drive, a solid-state drive, a USB flash drive, a memory card, a floppy disk, an optical disk such as a compact disk (CD) or a digital versatile disk (DVD), a magnetic tape, and other memory components. For example, a RAM may include one or more of a static random access memory (SRAM), a dynamic random access memory (DRAM), a magnetic random access memory (MRAM), and other forms of RAM. For example, the ROM may include one or more of a programmable read-only memory (PROM), an erasable programmable read-only memory (EPROM), an electrically erasable programmable read-only memory (EEPROM), and other forms of ROM.

[0084] The Appendix contains pseudocode of a method for allocating financial distributions fairly.

[0085] An advantage of embodiments of the present invention is that the undistributed income of a security can be separated from earned income distributions, thereby potentially helping to protect purchasers of income-producing securities from being unfairly taxed on the return of capital if the undistributed income is returned in the form of taxable income. Thus, the system allows security owners to avoid being unfairly taxed on their undistributed income.

[0086] Another advantage of embodiments of the present invention is that users may be equipped with information to prepare them so that they desire to be more accurately taxed according to the income they actually earn, rather than the income they purchase.

[0087] Yet another advantage of embodiments of the present invention is that they facilitate accurate taxation of a user's income by reducing the user's total distribution by the amount of the user's undistributed income.

[0088] A further advantage of embodiments of the present invention is that they may enable a user to seek to more accurately reclassify capital gains accrued when purchasing an investment fund. For example, a user may use embodiments of the present invention to seek to reclassify capital gain distributions received from an investment fund to accurately calculate the user's pro rata share of taxable capital gain distributions of the investment fund.

[0089] A further advantage of embodiments of the present invention is that it avoids the misclassification for tax purposes of income earned by a user during the period in which the user purchased securities. Another advantage of embodiments of the present invention is that it avoids the risk of incurring irreversible investment losses due to the user potentially paying more tax than he would have owed without the present invention.

[0090] A further advantage provided by embodiments of the present invention is that it provides a means for accurately classifying the income earned by purchasers of income-producing securities, so that the taxes paid by users are accurate and better represent the actual income earned from the securities.

[0091] A further advantage provided by embodiments of the present invention is that the method and system for calculating undistributed income on securities provides the ability to amend previously filed tax returns to accurately reflect income earned in prior tax years.

[0092] Yet another advantage provided by embodiments of the present invention is the avoidance of double taxation that occurs under the current system, where the purchaser is taxed on undistributed income and the seller is taxed on the capital gains generated by the undistributed income.

[0093] Although the above exemplary embodiments are described using particular components in example configurations, it will be appreciated by those skilled in the art that other exemplary embodiments may be implemented in different configurations and / or using different components. For example, it will be appreciated by those skilled in the art that the order of certain steps and certain components may be changed without substantially impairing the functionality of the present invention.

[0094] The representative embodiments and disclosed subject matter described in detail herein are presented as examples and illustrations, not as limitations. Those skilled in the art will appreciate that various changes in form and details of the described embodiments can be made to produce equivalent embodiments that remain within the scope of the invention. It is therefore intended that the subject matter in the above description be interpreted as illustrative and not in a limiting sense.

[0095] appendix Below is pseudocode for a method and system for calculating the correct income of a security using undistributed income. #Step 1: Upload tax lot file (open / closed) #Step 2: Validate all tax lot records for required fields 1. For open tax lot files account_id cot cusip long_short open_date open_id security tax_class tax_cost unit_total units 2. In case of closed tax lot file account_id close_date cot cusip long_short open_date open_id security tax_class tax_cost unit_total units total_book_gain_loss #Step 3: Fetch the dividend date based on the cusip and open_date defined in the tax lot dividend_date=select up_coming_dividend_date, previous_ex_dividend_date, announcement_date, dividend_frequency, dividend_rate from dividend_data where cusip=cusip AND open_date>=previous_ex_dividend_date AND open_date < dividend_ex_date #Step 4: Use the dividend_type and security_tag rules to calculate the missing values ​​from the following list 1.up_coming_dividend_date 2.previous_dividend_date #Step 5: Calculate the intermediate value as follows: days_in_pmt_period=up_coming_dividend_date-previous_dividend_date days_since_pmt_period=open_date-previous_dividend_date+1 distribution_factor=days_since_pmt_period / days_in_pmt_period calculated_tax=up_coming_dividend_amount * distribution_factor * units #Step 6: Add the calculated_tax calculated in the previous step to one of the following tax_buckets based on the dividend type and security tag rules: 1.qualified_income_tax_deduction 2.ordinary_jncome_tax_deduction 3.Iong_term_tax_deduction 4.roc_tax_deduction

Claims

1. A system for calculating a user's correct income on the first distribution received after purchasing a security, using undistributed income representing a return of capital to the user who purchased the security, comprising: a server configured to control the system, the server being further configured to use the undistributed income to calculate the correct income for the user on the first distribution received after purchasing the security; a system database operatively connected to said server, said system database including one or more of securities data available for use by said system and distribution data available for use by said system, said securities data including a list of securities generating income in a target taxing jurisdiction and a tag identifying a security type being processed, said distribution data being data regarding a history of securities distributions, said data including security payment period information and periodic total distributions per share of the security; A storage device connected to the server; Equipped with The server, acquiring user data, the user data including user purchase data relating to purchases of the securities by the users, the user purchase data including information on a security purchase date and a number of shares purchased, the user data further including information regarding whether the securities are still owned at the end of a first payment period following purchase of the securities; Obtaining the securities data and the distribution data from the system database; using the obtained user data, the security data, and the distribution data, and the undistributed income, to calculate the correct income of the user on the security at the first distribution after purchase of the security if the security is still owned at the end of the first payment period after purchase of the security, using the following formula: [0010] where S=number of shares purchased, D=total dividends per share for the period, T=time since the start of the payment period, and L=total time for the payment period, and S is obtained from said user data, D and L are obtained from said distribution data, and T is calculated from said security purchase date information and said security payment period information; Sending at least the calculated correct income to the storage; Exporting the calculated correct income from the storage to a predetermined destination upon request from the user. The system is configured as follows.

2. The system of claim 1 , further comprising a user device operated by a user, said user device operatively connected to said server.

3. The system of claim 2 , wherein the user device comprises one or more of a desktop computer, a notebook computer, a tablet, a mobile phone, and a smart watch.

4. The system of claim 3 further comprising a network.

5. 5. The system of claim 4, wherein the network includes one or more of a server-to-device network connection operatively connecting the server and the user device, a server-to-database network connection operatively connecting the server and the system database, and a server-to-storage network connection operatively connecting the server and the storage.

6. The system of claim 2 , wherein the server communicates with the user device via one or more of a network connection, a cloud, and a wired connection.

7. The system of claim 2 , wherein the server comprises a login module used by the user device to log into the server.

8. The system of claim 7 , wherein the server further comprises a user interface used by the user device to interface with the server after successful login to the server.

9. The system of claim 8 , wherein the server obtains the user data from the user device.

10. The system of claim 9 , wherein the server obtains the user data via the user interface.

11. The system of claim 1 , wherein the system databases include one or more of a securities database containing the securities data and a distribution database containing the distribution data.

12. The system of claim 1 , wherein the system databases include both a securities database containing the securities data and a distribution database containing the distribution data.

13. The system of claim 12 , wherein the system database comprises a relational database service.

14. The system of claim 11 , wherein the distribution database is configured to obtain the distribution data from an external data source.

15. The system of claim 5 , wherein the server is further configured to export the calculated correct income to one or more of the user device and an intermediary authorized by the user.

16. 16. The system of claim 15, wherein the intermediary comprises one or more of an accountant, a tax advisor, a broker-dealer, and a securities custodian.

17. The system of claim 1 , wherein the securities are distributed in one or more distribution types.

18. 20. The system of claim 17, wherein the distribution type is selected from a list including income, cash, short term capital gains, long term capital gains, special dividends, and return of capital.

19. 20. The system of claim 18, wherein the server is further configured to calculate correct income and undistributed income for each distribution type from the policy.

20. 20. The system of claim 19, wherein the server transmits one or more of the correct income and the undistributed income calculated for each distribution type to the storage.

21. 20. The system of claim 19, wherein the server transmits both the correct income and the undistributed income calculated for each distribution type to the storage.

22. 16. The system of claim 15, wherein the network further comprises a server-intermediary network connection operatively connecting the server and the intermediary.

23. A method for calculating a user's correct income on the first distribution received after purchasing a security using undistributed income representing a return of capital to the user who purchased the security, comprising: using a system including a server configured to control the system, the server further configured to use the undistributed income to calculate the user's correct income on the first distribution received after the purchase of the security; The server, acquiring user data, the user data including user purchase data relating to purchases of the securities by the users, the user purchase data including information on a security purchase date and a number of shares purchased, the user data further including information regarding whether the securities are still owned at the end of a first payment period following purchase of the securities; Obtaining securities data and distribution data from a system database operatively connected to the server, the securities data including a list of securities generating income in a target taxing jurisdiction and a tag identifying the securities type being processed, the distribution data including data regarding a history of securities distributions, the distribution data including payment period information for the securities and total periodic distributions per share for the securities; using the obtained user data, the security data, and the distribution data, and the undistributed income, to calculate the correct income of the user on the security at the first distribution after the purchase of the security if the security is still owned at the end of the first payment period after the purchase of the security, using the following formula: [0025] where S=number of shares purchased, D=total dividends per share for the period, T=time since the start of the payment period, and L=total time for the payment period, S is obtained from said user data, D and L are obtained from said distribution data, and T is calculated from said security purchase date information and said security payment period information; Sending at least the calculated correct income to a storage connected to the server; exporting the calculated corrective income from the storage to a predetermined destination upon request from the user. A method comprising:

24. 24. The method of claim 23, wherein the transmitting step includes transmitting, by the server, both the calculated correct income and the undistributed income to the storage.

25. 24. The method of claim 23, wherein the storage is further configured to store one or more of the user data and the undistributed income.

26. 24. The method of claim 23, wherein the storage is configured to store the user data, the calculated correct income, and the undistributed income.

27. 24. The method of claim 23, wherein the system further comprises a user device operated by a user, the user device operatively connected to the server, and the obtaining step includes obtaining the user data from the user device.

28. 24. The method of claim 23, wherein the securities are distributed in one or more distribution types.

29. 30. The method of claim 28, wherein the distribution type is selected from the list including income, cash, short term capital gains, long term capital gains, special dividends, and return of capital.

30. 30. The method of claim 29, wherein the calculating step includes the substep of calculating, by the server, a correct income for each distribution type from the policy.

31. 31. The method of claim 30, wherein the calculating step further includes a substep of storing the calculated correct income for each distribution type in the storage, the substep being performed by the server after the substep of calculating the correct income for each distribution type from the security.

32. A system for calculating a user's correct income on the first distribution received after purchasing a security using undistributed income representing a return of capital to the user who purchased the security, comprising: a server configured to control the system, the server being further configured to use the undistributed income to calculate a correct income for the user on the first distribution received after purchasing the security; a system database operatively connected to said server, said system database including both a securities database and a distribution database, said securities database including securities data, said securities data including a list of securities generating income in a target taxing jurisdiction and tags identifying the securities type being processed, said system database including a relational database service, said distribution database including distribution data relating to securities distributions, said distribution data including payment period information for the securities and periodic gross distributions per share for the securities, said distribution database further including historical securities data, said historical securities data including data relating to the history of securities distributions, said distribution database configured to obtain said distribution data from an external data source; A storage device connected to the server; a user device operated by the user, the user device being operatively connected to the server; a destination intermediary, the destination intermediary including one or more of an accountant, a tax advisor, a broker-dealer, and a securities depository; a network configured to operatively connect two or more of the server, the user device, the system database, the securities data source, the storage, and the intermediary, the network comprising one or more of a server-to-device network connection operatively connecting the server and the user device, a server-to-database network connection operatively connecting the server and the system database, a server-to-storage network connection operatively connecting the server and the storage, and a server-to-intermediary network connection operatively connecting the server and the intermediary; Equipped with the server communicates with the user device via one or more of a network connection, a cloud, and a wired connection; a login module used by the user device to log into the server; and a user interface used by the user device to interface with the server after successful login to the server; The server, obtaining user data from the user device via the user interface, the user data including user purchase data relating to a purchase of the security by the user, the user purchase data including information on a security purchase date and information on a number of shares purchased, the user data further including information regarding whether the security is still owned at the end of a first payment period following purchase of the security; Obtaining the securities data and the distribution data from the system database; using the obtained user data, the security data, and the distribution data, and the undistributed income, to calculate the correct income of the user on the security at the first distribution after purchase of the security if the security is still owned at the end of the first payment period after purchase of the security, using the following formula: [0030] where S=number of shares purchased, D=total dividends per share for the period, T=time since the start of the payment period, and L=total time for the payment period, S is obtained from said user data, D and L are obtained from said distribution data, and T is calculated from said security purchase date information and said security payment period information; Sending both the calculated correct income and the undistributed income to the storage; configured to export both the calculated correct income and the undistributed income to the user device and to one or more of the intermediaries authorized by the user; the securities are distributed in one or more distribution types, the distribution types being selected from a list including income, cash, short-term capital gains, short-term capital gains, long-term capital gains, special distributions, and return of capital; the server is configured to calculate a correct income for each distribution type from the security and transmit the calculated correct income for each distribution type to the storage; system.

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