Creating Tax Alpha in Your Mutual Fund Investments: Three Actions to Take Right Now

When it comes to the timing, likelihood and economic impact of a potential tax overhaul, who wins? Who loses? The answer is: Who knows? What we do know right now, though, is how to manage taxes between now and year end to minimize the bill.

Tax alpha is money saved from profitable tax management. There are three key considerations to weigh before December 31 that create tax alpha in a portfolio. It may go without saying, but tax-related selling is relevant only for taxable accounts. In other words, 401k plans, traditional IRAs, interest on municipal bond funds (but not any capital gains on those bonds) are tax-free on the federal level.