Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Put your most tax inefficient investments in the tax deferred accoounts. This would be things like bond funds, bonds, etc.
Put your most tax efficient investments in the taxable accounts. This would generally include index funds, individual stocks, municipal bonds,
Anything in the middle would go into the Roth's. Ideally the Roth should contain the investments that are expected to have large gains that incur high taxes. An example might be REITs or funds with a large turnover.

Bob

=====================================
I agree with most of that, but would add:

For a tax-efficient portfolio, you probably want to have dividend paying international stocks in your personal, taxable account. Because foreign taxes withheld from dividends can be claimed as a foreign tax credit on your personal return, more or less like federal withholding.

But the withheld foreign taxes are simply lost in an IRA or other retirement plan account. If you REALLY want to own them there, you just have to accept that as an investment expense, depending on how significant it is.

Bill
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement