> The unclear part about the mathematical method (the first option you asked about) is how/where the percentage is applied.
Exactly.
> You've got me curious now; it has been MANY years since I looked into it so I'm going to have to research it to see if there is a clearer answer anywhere.
Appreciate it, let me know what you find (I spent hours researching this and 1) couldn't find an example for this exact case and 2) every chat bot gives you a different answer and rationale, 3) I tried calling the IRS to ask about this, but they said they can't help with "advanced tax questions...").
