As you will see in the image below, I have an egress window set in the concrete foundation wall but framed with wood. The gap between the wood and the outer edge of my XPS foam is 3". See here (link).
My question is, in framing around this window, should my trimmer be even with the edge of the XPS or even with the inside edge of the wood around the window (in this photo (link), should it be even with A or B)?
I'm thinking it should be A. If so, should I put in a piece of trim that extends all the way from the window to the drywall? This would be about 10 inches. Or should I drywall in from the front part of the way and trim out from the window part of the way?