Now, the first block.
These types of investments include, but not limited to:
- Real estate
- Money market accounts
- Mutual funds
- Equities (stocks)
Your investment's distributions could be subject to long-term capital gains, short-term capital gains, or ordinary income tax on the earnings from these investments.
You might have a very good return, but your contribution has already been taxed and earnings will be taxed as well.
Next blog post, we will look at the second tax treatment block.