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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 125003  
Subject: Re: Foolish Four In IRA Or Outside + S&P Date: 11/5/1999 7:10 PM
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Some general thoughts:

When money comes out of an IRA, unless it's a Roth, it's taxed as ordinary income regardless of its nature. With this in mind, if you plan a mixture of short and long-term investments, you may be wiser to keep the long-term ones in your taxable account and do your short-term trading in the IRA. By doing this you would defer the short-term income until you retire and the long-term until you actually take the gains, at which time they will be taxed at a favorable rate. (We're assuming here, of course, that all will go up <g>.)

If you're planning on holding everything at least a year and a day, look next at dividend yields. If something's paying a lot of dividends, it's probably wiser to keep that in your IRA and keep the low dividend stocks in your taxable account. With this approach you will defer tax on the dividends until retirement.

Phil Marti
Tax Preparer
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