What's the most tax efficient way to invest liquid cash in a taxable account?
I have cash which needs to be liquid - may spend it to buy a house in the next 1-5 years depending on the opportunities in the real estate market. I am fine just to earn current short term interest rates available on the market.
3-12m Treasuries is the asset I like as there is no state tax (I have 5% in Massachusets) and it has limited interest rate risk. The maximum thing I can do for tax optimisation is to buy 0% bills up to 12m to maturity or a bit longer treasuries with close to 0% coupon and have a taxable event only at maturity.
Is there a more tax efficient way to do it? I am thinking about an ultra short Treasuries EFT with 0 distributions, but it looks like all of them are even less tax efficient vs. buing Treasuries as they do monthly distributions.
I have cash which needs to be liquid - may spend it to buy a house in the next 1-5 years depending on the opportunities in the real estate market. I am fine just to earn current short term interest rates available on the market.
3-12m Treasuries is the asset I like as there is no state tax (I have 5% in Massachusets) and it has limited interest rate risk. The maximum thing I can do for tax optimisation is to buy 0% bills up to 12m to maturity or a bit longer treasuries with close to 0% coupon and have a taxable event only at maturity.
Is there a more tax efficient way to do it? I am thinking about an ultra short Treasuries EFT with 0 distributions, but it looks like all of them are even less tax efficient vs. buing Treasuries as they do monthly distributions.
Statistics: Posted by JohnGault7 — Thu Dec 26, 2024 10:18 am — Replies 6 — Views 291