dyga

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.

dyga

Ah, thx… read the ques again and the windfall is after tax and not from an investment portfolio so no need to tax it again at withdrawal. These mistakes are getting old when you feel like you understand the material!