Taxable Investing > Complexities > Portfolios with Multiple Tax Entities


Investors often have multiple sub portfolios which can include a general taxable investment portfolio accompanied with specialized portfolios such as retirement accounts, partnerships, trusts, corporations, foreign investments and various estate planning vehicles.  These specialized portfolios often have unique tax, funding and disbursement rules.


Besides tracking these separate sub portfolios, there is also an asset location issue.  Based on the rules, certain assets are better positioned in different sub portfolios.  For example, a high yield taxable asset that would be avoided in a taxable portfolio might be well suited for a specialized sub portfolio that offered tax-exempt investing.



Additionally, investors with multiple sub portfolios requiring asset location and asset allocation often need aggregate analysis so they can plan their cash flow funding and expenditures.


The pie charts to the right show an aggregate portfolio with two sub portfolios: investment and 401(k).









Click on images to enlarge ...