Inheritance money and taxable investments

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neveragain
Posts: 221
Joined: Mon May 29, 2017 3:01 pm

Inheritance money and taxable investments

Post by neveragain » Sun Jan 21, 2018 11:39 am

I received some inherited money. I'm going to max out my IRA and 529 plans this year. I'd also like to put 10K in an index fund such as Fidelity FUSVX. I have this fund in my IRA and it seems to do pretty well. I'm wondering if the tax liability would offset any gains I would receive from these types of funds, though.

My CPA recommended that I look into municipal bond funds.

retiredjg
Posts: 32655
Joined: Thu Jan 10, 2008 12:56 pm

Re: Inheritance money and taxable investments

Post by retiredjg » Sun Jan 21, 2018 11:50 am

Broad stock index funds are pretty tax efficient. For just this reason, the most common suggestion. around here for a taxable account would be a total stock index and/or a total international index.

If you need bonds in the taxable account, if you are in a higher tax bracket, the bonds should be tax-exempt.

I suggest you use Fido's Total Stock Index instead of the 500 index because that eliminates the possibility of a wash sale if you sell the fund held in taxable at a loss.

neveragain
Posts: 221
Joined: Mon May 29, 2017 3:01 pm

Re: Inheritance money and taxable investments

Post by neveragain » Sun Jan 21, 2018 8:46 pm

Thanks, I will check out Fido's total stock index.

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