Tools · Taxes · Location, not allocation

Asset-location tax drag

Compare the annual tax on taxable-account bonds versus putting that sleeve in a traditional IRA and holding a stock index in taxable instead. Type your yield — the 4.2% default is an example, not today’s coupon. Primer: asset location. Paid sequence: implementation playbook. One-lot sale tax: capital gains.

The sleeve

Taxable bonds / REITs ($) Traditional IRA / 401(k) room ($) Bond / REIT yield % Stock index yield % (qualified) Years of this mix

Swap size is the lesser of the two dollar fields. Yields are yours. Do not paste a live Treasury or HYSA rate as if it were frozen.

The return this income sits on

Ordinary tax rate % LTCG / qualified rate % State tax % (applied to both sleeves) NIIT 3.8% (MAGI over the floor)

2026 LTCG 0% through taxable income $49,450 single / $98,900 MFJ; 15% through $545,500 / $613,700; then 20% (Rev. Proc. 2025-32). NIIT floors are not indexed. Most states have no LTCG break — type the rate that actually hits this sleeve.

Yearly location save

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Bond and REIT yield is taxed at ordinary + state + NIIT if you toggle it. Qualified dividends use the long-term rate you type plus the same state and NIIT. Ignores turnover, wash sales, munis, and ordinary tax on later IRA withdrawals — parking bonds in the IRA defers the 1099, it does not erase ordinary tax when you take the money. Educational only. Sequence: asset-location playbook.