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Author: cswersey Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Tax Sheltered investing Date: 9/17/1999 12:35 AM
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I am looking for a tax sheltered or tax minimizing approach to investing in stocks for my kids education. I want the assets in my name, which rules out Education IRA's (2 reasons - 1. At age 18, the foolish ones could decide they would rather have the car.... and 2. The FAF penalizes kids assets much higher than parents assets when determing any eligibility.)My wife and I max out our IRA's every year, and would like to put aside additional funds for the education.

Looked at VUL's, but the freight seems real, real steep, in spite of the "after tax numbers" workup.

Right now, have the money in Index 500's, low annual capital gains since they don't churn, etc. Is there another more sophisticated approach that I can implement relatively inexpensively that helps me avoid taxes, particularly at that point in the future when I start redeeming shares and paying on gains?
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Author: edcosoft Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18952 of 121219
Subject: Re: Tax Sheltered investing Date: 9/18/1999 2:35 PM
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Right now, have the money in Index 500's, low annual capital gains since
they don't churn, etc. Is there another more sophisticated approach that I
can implement relatively inexpensively that helps me avoid taxes,
particularly at that point in the future when I start redeeming shares and
paying on gains?


Use Roth IRA instead of deducting them from current income as regular IRAs.

Convert the RIAs you have to Roths

You have done almost the next best thing with index 500 funds, but if you want to get rid of even the LTCG switch to Vanguard Tax Managed G & I,

Instead of paying tuition out of the funds, gift shares to your son and let him cash them in to pay tuition. He'll probably be in the 15% bracket lowering the LTCG from your 20% to his 10%.

By the time he goes to college everything will be changed anyway but above postponess and lowers taxes now. Ed

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