# Things you're punting...

Just curious but what are some of the things that you guys are just throwing in the towel on and are essentially punting? For me…it’s definitely going to be gift, bequest, relative value tax calculations.

In my mind, all that Gift/Bequest stuff has a very high probability of being tested. The material’s actually not all that difficult, if you ignore those scary-looking equations and reason the answers out. I’m skipping Dietz/Modified-Dietz, because I think those methodologies are no-longer likely to be tested.

I punted Gift/Bequest. But will try again to revisit

…the exam

Gift/bequest & some weird WACC stuff

Some of global performance attribution, but I may go back and have another go at it.

Gift Bequest… I understand the concept but am not wasting time memorizing the calculations.

sbmarti2 Wrote: ------------------------------------------------------- > Some of global performance attribution, but I may > go back and have another go at it. With you here. If it shows up, my guess is it will be interpreting the output rather than complex calculations.

It’s 4th and inches in the Super Bowl with 5:00 left on the clock and you guys are thinking about punting???

Fight till the finish… not doing this again. Its the final countdown!

Options payoffs

Gips…

jdane416 Wrote: ------------------------------------------------------- > Gift Bequest… I understand the concept but am > not wasting time memorizing the calculations. So many want to give up on this. Just break it down. It is just a normal return reduced by taxes. Breakdown --> Normal after tax return [1 + r(1-t)]^n -----> If recipient pays tax then multiply by (1-tg) -----> If donor pays gift tax then multiply by (1-tg)+(tg)(te) -----> For estate multiply by (1-te) The only “tricky” thing to remember is the if donor pays tax because you have to add (tg)(te), known as tax alpha. tg=gift tax rate te=estate tax rate

thks

holden you golden

holden1176 Wrote: ------------------------------------------------------- > jdane416 Wrote: > -------------------------------------------------- > ----- > > Gift Bequest… I understand the concept but am > > not wasting time memorizing the calculations. > > > So many want to give up on this. Just break it > down. It is just a normal return reduced by > taxes. > > Breakdown > > --> Normal after tax return [1 + r(1-t)]^n > > -----> If recipient pays tax then multiply by > (1-tg) > -----> If donor pays gift tax then multiply by > (1-tg)+(tg)(te) > > -----> For estate multiply by (1-te) > > The only “tricky” thing to remember is the if > donor pays tax because you have to add (tg)(te), > known as tax alpha. > > tg=gift tax rate > te=estate tax rate Thanks for that! Its also the moment they start talking about Tecg (effective capital gains tax) then introducing a host of other other acronyms and by the end of it im looking at T followed by i, e, ecg, e , ig , id… TIME TO GIVE UP lol

In regards to the tax formula, which i am angry about bc i took the time to memorize it: CFAI 2011 Errata as of May 25: "Reading 22: “delete problem 3.D and its solution. This question is no longer assigned”

Oh, and punting anything related to pricing/valuing Swaps and FRA’s. In general if i see the word swap or FRA, i am moving on (unless it’s just providing the net payment on a certain date, i can do those all day).

markCFAIL Wrote: ------------------------------------------------------- > Oh, and punting anything related to > pricing/valuing Swaps and FRA’s. In general if i > see the word swap or FRA, i am moving on (unless > it’s just providing the net payment on a certain > date, i can do those all day). [highfives Mark] Hear, hear. Get that ish away from me and give me a problem I stand a chance of getting right, please.