This can be avoided by transferring the distribution directly to another tax-deferred account.
"It's better for a tax-deferred account," like a retirement fund.
That means the strategy works better in tax-deferred accounts.
First, until recently, few investors had much money in both taxable and tax-deferred accounts.
Currently, the law does not allow such a use of the tax-deferred accounts without a tax penalty for early withdrawal.
The value of estates can add up quickly, especially for workers who have invested through tax-deferred accounts or in company stock.
So it makes sense to use actively managed funds only for your tax-deferred accounts.
These investments are also best kept in a tax-deferred account.
A loss in a tax-deferred account, meanwhile, is not deductible.
If you're thinking of following Value Line's advice, however, it would be best to do so in a tax-deferred account.
