Capital Gains Tax w/ Cost Basis

Schweser Practice Exams Vol 2, Exam 1, Question 17.2 Can someone explain why when calculating the final part of the equation for tax Schweser only uses the +Tcg instead of +TcgB when the basis is clearly stated as 250,000?

it looks like cost basis is the same as the starting investment amount. if it was a 500,000 stock position with a cost basis of 250,000 that was sold, then you would use the .5 cost basis adjuster. in this case, they assume a starting amount of 250k worth of stock and cost basis is set =1 this is a strangely worded question.

Ahh ok. Confusing wording, but explanation makes sense. Thanks SkipE99.

hey i see you are going through the same exam I am right now. these are some pretty tricky questions. i wonder if this is considered a higher level difficulty exam than other schweser practice exams

I’m finding this one to extremely tricky. I really have to read these questions over so I can understand what they’re asking. I think the “tricky” level on this seems on par with CFAI but the wording on some is awful.