Saving in the Parents' Names
Saving money in taxable accounts in the parents' names has several advantages and disadvantages.
The advantages include the following:
The disadvantages include the following:
If you decide to invest in the parents' names, you should consider taking steps to minimize your taxes, such as investing in mutual funds that are managed to minimize the tax bite, such as those offered by Vanguard. You can also invest in individual stocks (i.e., holding them long enough to qualify for the long-term capital gains rate) and offset capital gains with capital losses. But if you invest in individual stocks, you should take steps to diversify your portfolio.
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