Iginla2011

When you account for taxes in the return calculation, you're accounting for taxes paid on investment income. Taxes applied to salary income would be adjusted for income tax.

I think you may be confused on the meaning of after-tax required return. This refers to the return the investor needs after accounting for taxes, so no need to do the 1-t adjustment. When it asks for pre-tax return, then you need to divide by 1-t. This is the return required meeting living expenses AND pay taxes on investment income.

Hope this helps.