In a high tax state (CA), in a taxable account, it seems that it would be better to buy 6 month T-bills than CDs, given that the rates are fairly close together. Am I missing something here? Is there a formula for determining which is better?You calculate the after-tax rates of return for each of them and then purchase the one that has higher return. This is not always as simple as it sounds as tax rates can change at many unexpected points due to phaseouts (and carryovers of Federal phaseouts to state tax returns), but a ballpark figure (usually accurate) can easily be determined.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ra