# Anyone care about taxes - R15?

Or we should remember what we learned last year

i asked a guy from stalla about it. he said it is brand new in 2010 and easy to plug in anywhere, essay or item set. it is easy to calculate. i am expecting 2-3 questions on it and can’t afford to lose those easy points.

Considering they added it to the L2 curriculum last year and didn’t test it, I expect to see this in the PM section of L3 this year (perhaps 2 questions), or 1 part of the AM section. I say max 6 points to this topic. In either case, it would suck to lose these points.

Pretty easy brownie points…

Yeah, I’ll be thrilled if I see any of this stuff on the exam - easy points if they actually include it! I would think it would go really well with an IPS…

Yep, either an IPS, or something along the lines of Schweser Vol 1 Exam 1 PM, where they just threw 2 random questions in there with all the details in the stem. IPS seems more logical though…

yeah… i really keep picturing them asking qualititaive item set questions like: “Which of the following will cause an increase in tax drag?” A) Investment horizon increases B) Return increases c) Both an increase in return and investment horizon

rosengri Wrote: ------------------------------------------------------- > Or we should remember what we learned last year The taxes reading in L3 is the EXACT same reading from L2 in the CFA curriculum. Luckily I saved my notes from last year, so I’m just reviewing those. Surprisingly, I remember a lot of it. Pound the equations into your brain so you can spit them out if it shows up on the test.

If you take a second to think about what you’re calculating the equations really aren’t necessary. Tax deferred account? Just grow the account to its final value and then tax the capital gains at the end. No need for whatever that goofy formula is. I think the only formulas I have on my sheet for that section are the accural equivalent tax rate and return.

how do you conceptualize the after-tax return calculation? FVIF_art = (1+R_art)^n * (1-T_ecg) + T_ecg - (1-B)*T_cg This is the only scary one for me.

Aimee Wrote: ------------------------------------------------------- > If you take a second to think about what you’re > calculating the equations really aren’t necessary. > Tax deferred account? Just grow the account to its > final value and then tax the capital gains at the > end. No need for whatever that goofy formula is. I > think the only formulas I have on my sheet for > that section are the accural equivalent tax rate > and return. You’re probably right for the individual ones (i.e. accrual taxes, deferred capital gains, wealth tax, etc.). But, for me at least, there is no way I could think through the calculation for FVIF incorporating effective capital gains tax. There are three equations to get to the answer, and the last one has some little differences that could easily throw me (and maybe you) off.