Understanding Tax Deferral
The parity principle revealed
By Kaye A. Thomas Posted June 17, 2007
The benefit of tax deferral isn't what most people think.
Tax deferral — legally postponing a tax until a later year — is a common theme in strategic investing. It’s the key benefit of traditional IRA and 401k accounts. Knowledgeable investors manage their capital gains to achieve tax deferral as well. Despite its importance, tax deferral is often misunderstood. People tend to believe they’re receiving one kind of benefit when in reality they’re receiving another.
By Kaye A. Thomas Posted June 17, 2007
The benefit of tax deferral isn't what most people think.
Tax deferral — legally postponing a tax until a later year — is a common theme in strategic investing. It’s the key benefit of traditional IRA and 401k accounts. Knowledgeable investors manage their capital gains to achieve tax deferral as well. Despite its importance, tax deferral is often misunderstood. People tend to believe they’re receiving one kind of benefit when in reality they’re receiving another.
posted by Milt Baker CPA | 11:07 AM
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