Confusing Term. TDA

[2004028]

The nation of Pensacola is best described as having a flat and heavy tax regime. Which of the following assets would be most appropriate for Pensacola investors using a TDA?
Anyone anticipate for this kind of Qs in real exam?

 

[jlive1975]

TDA = Tax Deferred Account if i’m not mistaken. I wouldn’t expect acronyms to be used, where did you get this question from?

 

[2004028]

It is from Qbank 2012.
Man I hope they aint gonna show up.

 

[cpk123]

TDA is very frequently used in the CFAI Text book. So I do not see that as a problem.

 

[darkstar]

Flat and heavy means that there is favorable treatment for dividends, but not interest and capital gains - so you’d want to place growth assets and assets that generate interest income into a tax deferred account.
Seems like a fair question to me.

 

[janakisri]

darkstar , flat and heavy means favorable treatment for dividends and capital gains . and unfavorable treatment of interest income.

 

[darkstar]

Are you sure about that?

 

[janakisri]

Yes I am sure

1. CFAI Book 2 STUDY SESSION 4 PRIVATE WEALTH MANAGEMENT (page 80 of 236 — printed page 236) Column 7 ( last one )
4. Cite / Link
5. Next Page
6. 
   

 

[mcap11]

right, since cap gain and divys are taxed more than int income, you want to put them in the TDA……

 

[darkstar]

Page 236 states that dividends and capital gains are taxed at ordinary rates whereas interest is taxed at a favorable rate…

 

[cpk123]

sorry misread whole post…

 

[janakisri]

sorry my bad , I meant the opposite of what I wrote . Div and Cap gains are taxed unfavorably while int income is taxed favorably .
I was trying to correct darkstar when he wrote:
“favorable treatment for dividends, but not interest and capital gains”
( cap gains is part of the heavy like dividends , not the not so heavy , like interest )