Non-Qualified Investing

A non-qualifying investment is an investment that does not qualify for any level of tax-deferred or tax-exempt status.A non-qualifying investment is an investment that does not qualify for any level of tax-deferred or tax-exempt status. Investments of this sort are made with after-tax money. They are purchased and held in tax-deferred accounts, plans or trusts. Returns from these investments are taxed on an annual basis.

With non-qualifying investments, typically the investor is under no annual restrictions on the amount they can put towards such assets. This can offer more flexibility in some regards compared with qualifying investment accounts, which typically have maximum amounts that may be contributed depending on the type of asset. For instance, employee 401(k) contributions have an annual maximum contribution that can be made toward their plans. The limit may change to some degree, determined by the Internal Revenue Service. A non-qualifying investment can see any size contribution made over the course of each year according to the account holder’s strategy for saving.

Account holders can also make withdrawals on non-qualifying investments when they want, though they will pay tax on interest and other gains such as appreciation that have accrued.

Examples of non-qualified investments may include individually, jointly, and entity owned stocks, bonds, mutual funds, precious metals, guns, antiques, and real estate.

If you have questions regarding the subject of qualified investing versus non-qualified investing, fell free to call 888-226-7614 or visit www.kingdomplanadvisory.com to schedule a free consultation.

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