Best location for international funds.

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Topic Author
CnC
Posts: 961
Joined: Thu May 11, 2017 12:41 pm

Best location for international funds.

Post by CnC »

Hey guys, it's been a while and I I'm just sanity checking myself.


I haven't bought any international index funds in a while and my AA has gotten a bit out of wack.

I believe last time I did research into it, the best place to hold your international funds was in your taxable account. Because you have to pay some taxes on the profits/dividends oversees and you can write some of those taxes off for USA taxes.


Am I correct or am I mixed up.


Thanks
-Cnc
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retired@50
Posts: 6673
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Best location for international funds.

Post by retired@50 »

Generally speaking, yes, holding an international stock index fund in your taxable account is a solid choice.

See wiki page for details: https://www.bogleheads.org/wiki/Foreign_tax_credit

However, too much of a good thing can spoil the broth.
See thread on one potential issue...: viewtopic.php?t=211120

The thread above may or may not apply to your own situation, but really just serves as an illustration that the correct answer in investing is often "It depends".

Regards,
This is one person's opinion. Nothing more.
Topic Author
CnC
Posts: 961
Joined: Thu May 11, 2017 12:41 pm

Re: Best location for international funds.

Post by CnC »

Thanks I knew there was a link somewhere but I haven't been on Bogleheads for a while and I had forgotten how to locate the info.
deikel
Posts: 1209
Joined: Sat Jan 25, 2014 7:13 pm

Re: Best location for international funds.

Post by deikel »

Just for reference, if the portfolio is not terribly large, your tax savings holding them in taxable and getting foreign taxes 'back' - it makes like 10-15 USD for me....its laughable. Its also free money, so no complain, but its really not a tax savings strategy until your portfolio must be quite large in taxable - at which point you probably have other avenues to save taxes IMO.

dialing back on the venti latte will save you more
Everything you read in this post is my personal opinion. If you disagree with this disclaimer, please un-read the text immediately and destroy any copy or remembrance of it.
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