fall 2018 #16 capital gain tax on net realized capital gain
I want to ask that 2 questions:
1/ Is the Investment gain attribute to FAIT and Investment gain attribute to suprlus and capital already cover the net realized capital gain? If yes, then why do we need to subtract it in the calculation for PHS
2/ I think the tax for realized capital gain will be considered in the investment income calculation but on the examiner's report, it is calculated directly in the capital and surplus, is there anything wrong here?
Comments
1) "Net realized capital gain" is a partition from total investment gain, other than the two you cite. However, the -46 that goes into the surplus calculation at the end is "change in net unrealized capital gain.
2) As "capital gain tax on net realized capital gain" is given separate from the investment gain items, it is fair to assume that investment gain items are not net of this tax. That is why it is applied separately.