Tax Deduction Method - Error on Quicksheet

CFA Level III
#1

On the kaplan schweser quicksheet it says the equation for calculating the tax rate using the deduction method is:

Tdeduction = Tresidence +Tsource(1-Tresidence)

I think it should be

Tdeduction = Tsource + Tresidence(1-Tsource)

Am I correct? If I am, I find this unacceptable. I spent an hour working this s**t out. in my head. Thank you schweser!

#2

what is really the difference between the 2?

Tdeduction = Tresidence +Tsource(1-Tresidence)

= Tres + Tsrc - Tsrc * tres

Tdeduction = Tsource + Tresidence(1-Tsource)

= Tsrc + Tres - Tres * Tsrc

Same difference if you ask me!

#3

I guess mathematically they are the same… I feel like an idiot. Just makes more sense to me the way the variables are organized in the first equation.

#4

I think you intuitively understand that you have to pay Tsource first so you expect it to be the base Tax rate then pay the additional Tresidence with deduction. It is logical but mathematically the same, so on the exam you can do it either way.