A common error is focusing on one asset class, and comparing its tax implications in different locations. For instance, comparing the tax drag on dividends from an int'l stock fund in a taxable account with its loss of foreign tax credit in a tax-qualified account is fine, but you also have to consider what will go into the taxable space instead if you hold int'l stock in say a 401K.
The correct analysis is to compare two location mappings for the entire portfolio, and calculate the tax drag for the entire portfolio with each location mapping.
The use of funds that hold more than one asset class in a taxable account will reduce flexibility once you have a significant embedded gain.
The correct analysis is to compare two location mappings for the entire portfolio, and calculate the tax drag for the entire portfolio with each location mapping.
The use of funds that hold more than one asset class in a taxable account will reduce flexibility once you have a significant embedded gain.
Statistics: Posted by Northern Flicker — Tue Jul 02, 2024 1:45 am — Replies 18 — Views 1891