effective capital gains tax rate

[lizihengtotti]

Reading 11 section: “Blended Taxing Environments”.

How do the below two equations derive?

effective capital gains tax rate:

T* = t_cg(1 – p_i – p_d – p_cg)/(1 – p_it_i – p_dt_d – p_cgt_cg)

The future after-tax accumulation: FVIF_Taxable = (1 + r*)ⁿ(1 – T*) + T* – (1 – B)t_cg

[Harrogath]

I will just bother at memorizing the formulas

[S2000magician]

I wrote an article that covers all of this in detail, here: http://www.financialexamhelp123.com/tax-regimes/

(Full disclosure: as of 4/25/16, there is a charge to read the articles on my website. You can get an idea of the quality of the articles by looking at the free samples here: http://www.financialexamhelp123.com/sample-articles/.)

[S2000magician]

@Harrogath

I will just bother at memorizing the formulas

I, on the other hand, would not.

[Harrogath]

@S2000magician

@Harrogath

I will just bother at memorizing the formulas

I, on the other hand, would not.

I do understand the components of each formula, but about the algebraic derivations I do not bother much.

[S2000magician]

@Harrogath

@S2000magician

@Harrogath

I will just bother at memorizing the formulas

I, on the other hand, would not.

I do understand the components of each formula, but _ about the algebraic derivations I do not bother much _.

Nor do I.

In the article I wrote, although I explain each formula, I explicitly say that you shouldn’t memorize them or derive them. You should understand what each formula is doing, and be able to do that on the fly with whatever information is given.