All of the following investments are recommended for tax qualified accounts except:
A)This is recommended.Bonds create ordinary income.
B)This is recommended.Certificates of Deposit create ordinary income.
C)Stock.Creates long-term capital gain income;therefore best used in taxable accounts.
D)This is recommended.Treasury bills create ordinary income.

Question

Quizplus · Accepted Answer

Stocks create long-term capital gain income, which is more tax-efficient when held in taxable accounts rather than tax-qualified accounts like IRAs or 401(k)s. The other options listed (bonds, certificates of deposit, and treasury bills) all create ordinary income, which is taxed at the same rate in tax-qualified accounts as it is in taxable accounts. Therefore, they are all recommended for tax-qualified accounts as well.

All of the Following Investments Are Recommended for Tax Qualified