defour44

cpk123 wrote:
in return terms - Q6
Part a: Income: 0.02 * .75 = 0.015
Part b: Cap Gains: 0.12 * (1-0.15*.75) = .1065
Net = .1065 + .015 = 0.1215
You double counted the .12 portion inside as well.
Oh I see…thank you for the explanation, yes the numbers check out with the calculation above. I was confused because the text says that the Capital Gains Tax is to be calculated as (price appreciation * .15 * turnover rate), so I thought that this was the calculation for the actual cap gain tax RATE as opposed to the actual percentage tax charged…poor wording in the text I guess.
Any idea on Q2? I fear that this kind of confusion about when the inflation rate should/shouldn’t be subtracted will lead to unnecessarily lost points on the return calculations for IPS on the exam..