White Coat Investor Podcast WCI #12: Investing in Taxable Accounts - What You Need to Know
Apr 25, 2017
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Step Up In Basis Makes Taxable Assets Estate Efficient
- Remember step-up in basis: heirs get a cost basis reset at death, eliminating capital gains tax on appreciated taxable assets.
- This makes donating or passing taxable mutual funds comparable to some life insurance tax benefits.
Donate Appreciated Shares Instead Of Selling
- Donate appreciated shares to charity to get the deduction and avoid capital gains, then repurchase replacement shares immediately.
- This flushes low-basis holdings without the 30-day wash-sale constraint and preserves your target allocation.
Use Robo Advisors For Automated Tax Efficiency
- Consider robo-advisors like Betterment for taxable accounts because their automated tax-loss harvesting can justify fees.
- Robo platforms can capture harvesting value continuously with algorithms most DIY investors won't match.