Tax-Deferred Dilemma

After you have dealt with inheritingan IRA, it's time to face some relatedtax issues. Deciding how to divvy upassets between taxable and tax-deferredaccounts has always been confusing,and the new tax law hasn'tmade it any easier. Some of the rules ofthe game have definitely changed. Afew rules of thumb are in order.

In tax-deferred accounts, youshould keep assets that throw offinterest, like bond funds. Junk bondfunds and real estate investment trustfunds, where your gains generallydon't qualify for the new dividend-incometax breaks, belong there too.Mutual funds that generate a lot ofshort-term capital gains also belong ina tax-deferred account. In a taxableaccount, keep dividend-heavy stocksthat you intend to hold for a year, aswell as stock index funds. Your taxableaccount is the place to park tax-exemptmunicipal bonds and municipalbond funds.