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DGI w/ Roth IRA
#1
Besides REITs, are there specific types of Dividend Growth stocks that are better suited for a Roth IRA vs. a taxable account?
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#2
(06-05-2016, 11:58 PM)kh137 Wrote: Besides REITs, are there specific types of Dividend Growth stocks that are better suited for a Roth IRA vs. a taxable account?

MLP and BDC types come to mind.  

On the opposite end, you have to be careful about adding foreign companies to an IRA.  For example, as an owner of AGU, Canada takes taxes immediately out of their dividends to me.  I get this back as a credit when I do my US taxes.  However, I don't think you get such a credit when the stock is within an IRA.
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#3
There has been much written about the subject, but the fact is, MLPs exceeding a certain amount of UBTI are still taxed even in a retirement account.

I believe you don't have to worry about it until UBTI exceeds $1,000.

My understanding is that it really came up in droves when people went from KMP to KMI.

It is for this reason that I avoid MLPs taxed via K-1 in retirement account.

Canadian stocks do not withhold tax if it is in an IRA, that is the deal made with USA. So in your individual account, yes Canadian stocks will have dividend withholding. But in an IRA, no withholding.
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#4
Here's a good explanation of MLP's and their tax benefits if NOT held in a retirement account such as an IRA or ROTH. There's a trade off to think about whether to hold MLP's in a retirement account or not.

http://www.fool.com/investing/general/20...to-kn.aspx

And DR is correct, there should be no tax withholding's from owning Canadian stocks within a retirement account due to the Canadian/United States Tax Treaty. There is also no double taxation if held in a brokerage account, meaning you'll get a foreign tax exemption when you file your taxes. And there is no foreign tax exemption of any stock held in a retirement account, only brokerage accounts. So, if a country taxes you 35% as a U.S. tax payer you'll get a foreign tax exemption of 15%, bringing your tax basis to 20% if held in a brokerage account. If held in a retirement account and there's no U.S. tax treaty then the investor looses the full 35% or whatever the amount is to taxes. Pay attention to tax treaties and certain scribs when investing in foreign companies. It can be complicated and not every country is the same.

REITS are taxed as ordinary income so it's advantageous to have them in a tax deferred account while one is in a higher tax bracket.
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#5
(06-05-2016, 11:58 PM)kh137 Wrote: Besides REITs, are there specific types of Dividend Growth stocks that are better suited for a Roth IRA vs. a taxable account?

In general, I like to keep my faster growing, lower yielding companies (think DIS, NKE, V) in my Roth IRA and my higher yielding, slower growing companies (Think T, BP, SO) in my traditional IRA.
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#6
(06-08-2016, 05:33 PM)DividendGarden Wrote:
(06-05-2016, 11:58 PM)kh137 Wrote: Besides REITs, are there specific types of Dividend Growth stocks that are better suited for a Roth IRA vs. a taxable account?

In general, I like to keep my faster growing, lower yielding companies (think DIS, NKE, V) in my Roth IRA and my higher yielding, slower growing companies (Think T, BP, SO) in my traditional IRA.

Wait....

I can have a ROTH and a Traditional?! I thought it was one or the other?
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#7
(06-09-2016, 09:07 AM)twil Wrote: I can have a ROTH and a Traditional?! I thought it was one or the other?

You can have both:
http://www.investopedia.com/ask/answers/03/081503.asp
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#8
(06-09-2016, 09:07 AM)twil Wrote:
(06-08-2016, 05:33 PM)DividendGarden Wrote: In general, I like to keep my faster growing, lower yielding companies (think DIS, NKE, V) in my Roth IRA and my higher yielding, slower growing companies (Think T, BP, SO) in my traditional IRA.

Wait....

I can have a ROTH and a Traditional?! I thought it was one or the other?

Oh, no you can definitely have both, absolutely.  I would bet that most people on this forum have both.  You can even do Roth conversions from your traditional IRA to your Roth IRA.
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#9
Interesting.

I thought it was just one or the other. Today I learned!
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#10
(06-09-2016, 09:58 AM)twil Wrote: Interesting.

I thought it was just one or the other. Today I learned!

Nope, just separate records for tax purposes.  Remember that the Roth account is after-tax contributions, but the traditional IRA is pre-tax contributions, so they can lower your taxable income.
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#11
You can have both but you can still only contribute the amount allowed by law. For example, if you have both it's not $5500 per account, it's $5500 total.
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#12
(06-11-2016, 08:54 PM)rayray Wrote: You can have both but you can still only contribute the amount allowed by law. For example, if you have both it's not $5500 per account, it's $5500 total.

I have both and a 491k You should speak to the tax man about contributtons also.
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