Marginal Rate
The relevant tax rate is the marginal tax rate in making finicial decisions.
To calculate capital gains tax on investment profits, subtract the purchase price of the investment from the selling price to determine the capital gain. Then, apply the capital gains tax rate to the gain to determine the tax owed.
To calculate capital gains tax on investment profits, subtract the original purchase price of the investment from the selling price to determine the capital gain. Then, apply the capital gains tax rate to the gain to determine the tax owed.
Claim the gain or loss, relevant to the holding period of the investment.
The answer depends on the relevant tax rate in the relevant jurisdiction. Many countries have a dollar as their currency and there is no indication in the question as to where in the world the question refers to.
You can click on the related link below for some information.
Marginal Tax Rate Calculator Knowing your income tax rate can help you calculate your tax liability for unexpected income, retirement planning or investment income. This calculator helps you estimate your average tax rate, your current tax bracket, and your marginal tax rate for the 2010 tax year. Please note that this calculator uses the 2010 preliminary tax tables subject to change by the IRS.
To calculate your capital gains tax, subtract the cost basis of your investment from the selling price to determine the capital gain. Then, apply the appropriate tax rate based on how long you held the investment. Short-term capital gains are taxed at your ordinary income tax rate, while long-term capital gains are taxed at a lower rate.
Lots and lost have some type of this...whether it be never being taxable, like some State & Muni bonds, or deferring the tax, or being payable at a lower rate (capital gains rate). The return for the investment is normally lower by the effect of the tax advantage (generally figured at a high tax rate), than a corresponding investment that is fully taxable.
You can click on the related link below for some information.
To calculate your capital gains tax, subtract the cost basis of your investment from the selling price to determine the capital gain. Then, apply the appropriate tax rate based on how long you held the investment and your income level.
If the relevant tax rate is t% and the after-tax cost is n, then the basic cost is n/(1 - t/100).