Schw Vol2, Ex2AM Ques 1 IPS and Taxes Ques?? into, only, investment, account, capital

ASSet_MANagemen

In calculating the after tax nominal return for the coming year the answer key shows $116,438 needed from the portfolio. I converted the $116,438 into $152,250 to compensate for the 25% taxes that would be paid when withdrawing this from the investment portfolio.

Did they not tax the withdrawals from the investment account b/c it did not specifically state that withdrawals are taxed - only income and capital gains???

PalacioHill

anytime you withdraw from the portfolio , you have to "realize" gains ( by selling out of those investments). However in a tax free account , those gains are taxed at withdrawal time. I don't think there is a big contradiction here.

However Schweser is full of other typographical errors. e.g. They do not ask for Unique in the question but show it in template etc.etc.



Edited 1 time(s). Last edit at Monday, May 30, 2011 at 09:26AM by janakisri.