I hate taxes. I see in reading 22, an errata was released and the equation is now:
Rpl = [(1 + R’1)…(1+R’2) ( 1 - liquidation tax /final value) ]^1/n - 1
I dont understand. This still does not get me the correct answer for BB4.
What is liquidation tax/final value? Within the errata, it says it is:
(1 - 0.02).
Why does liquidation tax/final value equal 0.02?
It states liquidation tax = (final value - tax basis) * Capital gains rate
Can somebody sub in the numbers from the example and show how it’s expanded. I don’t understand with all the steps skipped.
Thank you