hard · Certified Financial Planner Investment Planning

The Mendez household is in the 37% marginal tax bracket and is subject to the 3.8% net investment income tax. They are reviewing the asset location of their $1,200,000 portfolio.

Which of the following assignments is most consistent with maximizing after-tax wealth?

  1. High-yield corporate bonds held in the taxable brokerage account.
  2. Broad equity index ETFs held in the taxable brokerage account.
  3. Municipal bonds held within a Traditional IRA wrapper.
  4. International equity funds with high withholding taxes held in a Roth IRA.

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