[MLGD]

I am working on a question and I keep getting my net of tax amount wrong. I am to report the Gain on sale from discontinued operations, (net of tax) the amount with tax is 15200. The tax rate is 33% and The amount net of tax that is correct is 5494. How do I arrive at this number? If I simply multiply 15200 by 33%, I get the wrong answer. Can anyone help me with this?

[ArcSine]

Something's out of sync in your numbers, or else there's additional info in the problem you omitted. For example, if (as stated) the pre-tax gain is 15,200 while the after-tax gain is just 5,494, that indicates that a tax bite of 9,706, which is substantially north of 50% of the pre-tax gain (whereas your info indicates an effective tax rate of 33%).

Letting P denote a pre-tax gain; t represent the tax rate (as a decimal); and A denote the after-tax gain, P and A have the equivalent relationships

A = P x (1 - t)

P = A / (1 - t)= P x (1 - t)

A = [bbcode][/bbcode]/ (1 - t)

So if the pre-tax gain [bbcode][/bbcode]is 15,200 the after-tax gain [bbcode][/bbcode]would be 10,184. On the other hand, if the correct after-tax gain is 5,494 then the pre-tax gain must be 8,200.

Go back and check the problem carefully.

[morgaine300]

Just a quickie note (cause I agree the info doesn't add up somewhere), the "net of tax" amount isn't the 33%. It's after the 33% has been taken off. So you seem to be confusing what "net of tax" means.