Capital Gains Tax w/ Cost Basis someone, instead, equation, only

Palantir

Schweser Practice Exams Vol 2, Exam 1, Question 17.2

Can someone explain why when calculating the final part of the equation for tax Schweser only uses the +Tcg instead of +TcgB when the basis is clearly stated as 250,000?

aidebaobao

it looks like cost basis is the same as the starting investment amount. if it was a 500,000 stock position with a cost basis of 250,000 that was sold, then you would use the .5 cost basis adjuster. in this case, they assume a starting amount of 250k worth of stock and cost basis is set =1

this is a strangely worded question.

jmh530

Ahh ok. Confusing wording, but explanation makes sense. Thanks SkipE99.

susana

I'm finding this one to extremely tricky. I really have to read these questions over so I can understand what they're asking. I think the "tricky" level on this seems on par with CFAI but the wording on some is awful.