In our last blog, we introduced 3 blocks every investor should pay attention to about their investment contribution and distribution, from tax perspective.
Now, the first block.
Contribution: after-tax
Distribution: taxable
These types of investments include, but not limited to:
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.
Now, the first block.
Contribution: after-tax
Distribution: taxable
These types of investments include, but not limited to:
- Real estate
- CD's
- Money market accounts
- Mutual funds
- Annuities
- 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.
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