A taxpayer contributed $1,000 (in after-tax dollars) to a deductible IRA account when their marginal tax rate
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Question:
A taxpayer contributed $1,000 (in after-tax dollars) to a deductible IRA account when their marginal tax rate was 35%. Funds in the account earn a before-tax rate of return of 7% per year. What is the taxpayer's annualized after-tax rate of return on this investment (rounded to the nearest 10th of a percent) if they withdraw the full amount in 20 years when their marginal tax rate is 30%?
5.7%
6.6%
7.0%
7.4%
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: