This is a short and sweet letter.
I was perusing the Internal Revenue Code (it’s one of the things I do) and started to think about the various sources of tax-free income.
Here are the 11 that jumped out at me:
1. Roth IRAs
2. Social Security benefits up to the taxable limits
3. Tax-free IRA withdrawals (on top of tax-free Social Security)
4. Home sale gains of up to $250,000 ($500,000 if married, filing jointly)
5. Tax-free capital gains and dividends when you hit the sweet spot
6. Capital gains sheltered with capital losses
7. Stepped-up inherited assets
8. Section 1031 real estate exchanges when held until death
9. Qualified small business tax gains
10. Section 529 college savings plans
11. Coverdell Education Savings Accounts
When it comes to tax planning, tax-free tops the list.
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