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Portfolios 505: What Goes Where? The Art of Asset Location

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1.
Which investments do an effective job of restraining capital gains distributions?
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All of the above. All of these investments are structured in such a way as to keep the lid on capital gains distributions.
2.
In general, which investments below are not good choices for tax-sheltered accounts?
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Non-dividend paying stocks. Long-term capital gains, which is what you have when you sell a stock that you've held for at least a year, are taxed at a much lower rate than is bond income or dividends.
3.
Cash investments are taxed at ordinary income rates, meaning it's wise to put them in tax-sheltered accounts to cut down on your tax burden. But you might want to contradict that advice because _______.
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Both of the above. Sometimes practical needs just outweigh tax needs.
4.
What is asset location?
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How investors distribute their investments between tax-sheltered and taxable accounts. Asset location refers to how investors divvy their investments between tax-sheltered and taxable accounts.
5.
Tax-wise, bonds are a good fit for tax-sheltered accounts rather than taxable accounts because their payouts are taxed at your ordinary income tax rate.
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True. For tax purposes, it probably makes sense to keep bonds in tax-sheltered accounts because of their relatively high tax rates.