Alternative Options

There are options when transitioning from a taxable growth environment - Immediate, Growth Only, and Growth and Principal. The most appropriate choice will depend upon the client's willingness to reposition and the constraints of the target account(s).

There are three optional strategies that may reduce the ongoing tax burden of growth in a taxable account. You could immediately move all the principal to a tax advantaged account, move just the earnings, or move both principal and interest over a period of time.

Let's examine the effect each strategy has on the tax.

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