First, the program is somewhat aggressive. It doesn't ask, "How much do you need to live on?". Instead, it says, assuming you will spend the same amount every year, what is the most that can be spent without running out.
Let me explain the output a tad.
The first year we have this:
age save spend IRA fIRA SEPP Roth fRoth IRA2R rate tax spend extra
57: 1250 310 1700 0 0 15 0 319 33 127 299 -115
(Yes I have two 'spend' columns which isn't that helpful. I never noticed.)
The first 2 columns are for the after-tax savings (which includes the 3 stocks) and spending from that. It has you withdrawing $310k from that money to live on.
Next is the $1.7M IRA and spending from that IRA (fIRA). It is zero because you are less than 59.
SEPP is an experimental feature that is not enabled by default. It is income from setting up a 72(t) withdrawal from a portion of your IRA. The program rarely thinks that is a good idea and I am skeptical of that so I have it disabled.
Next, we have your Roth balance, money withdrawn from the Roth (fRoth) and money added to the Roth from the IRA via a Roth conversion (IRA2R). This is recommending $319k be converted the first year.
The 'extra' column is for extra expenses you will have this year. I originally added this for paying off my mortgage and weddings for my daughters, places that are exceptions to the "all years are the same" idea. In this case, it is negative because you have outside income.
Now you will be taxed for $434k income (319+115) which puts you at the very top of the 33% tax bracket. That is basically what it is doing, it is managing your taxable income to keep you in the same tax bracket every year to avoid 40% years. So to answer your other questions, it has no idea about AMT. It assumes all investments are held over a year before selling and it knows nothing about qualified dividends. No NIIT either. ;-)
So the 'tax' column shows the expected tax paid for this year. $127k This is basically the simplistic CG model + income tax assuming the straight tax table after standard deductions.
The second 'spend' column is the amount of money available to spend after taxes. The idea is that it should be constant, but that isn't always true.
If you have spent more time calculating the other tax considerations, I would be very interested in knowing which ones move things around the most and should be completed.
I also should write up a description of how this model works. It is very cool but has some serious limitations about what types of things I can model.
The solver takes N independent variables X(i) and can minimize the function sum(C(i)*X(i)) for some constants C(i), and I can add a pile of constraints that are linear functions using those variables. In this case, the withdrawal from each account every year is a variable to be solved. For example, I have an equation that says the starting balance of each account, minus all withdrawals must be positive. Or Roth withdrawals must come from deposits that happened at least 5 years previously.
In the case of the tax table, I have a separate inequality for each tax bracket and when you satisfy all of those inequalities, then you get the piecewise linear tax table.
So I can't model CG tax by looking at which money I am spending, but I could make them separate accounts.
On having an estate for your children my understanding is that a Roth account is what you really want because there all the taxes have been paid. Notice that the capital gains taxes for those stocks are really much smaller than the income taxes for money out of your IRA. What the tool is doing is spending your after-tax money up front and using that to 'shield' your Roth conversions so you are not spending too much on taxes. I could try to add a feature to add an estate at the end, but I would be surprised if that would select saving your stock to the end. Note, adding a couple years to the simulation would be very similar to modeling an estate...