Mastering Smart Investments: Strategies for Wealth Creation by Gleam knowledge

Author:Gleam, knowledge
Language: eng
Format: epub
Published: 2023-12-24T00:00:00+00:00

2. Asset Location and Allocation

Asset Location: Place tax-inefficient investments (high turnover funds) in tax-advantaged accounts to minimize taxable events. Tax-efficient investments (index funds) can be held in taxable accounts.

Tax-Advantaged Bonds: Municipal bonds offer tax-exempt interest income at the federal or state level, suitable for taxable accounts.

3. Tax-Loss Harvesting

Sell Losing Investments: Realize capital losses by selling investments at a loss to offset capital gains. Excess losses can offset ordinary income up to a certain limit.

Maintain Investment Exposure: After selling a losing investment, reinvest in a similar but not identical asset to maintain market exposure and not violate IRS wash-sale rules.

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