Evaluate Tax Implications Of Investments Practice Test

A taxpayer wants to rebalance by reducing a concentrated stock position without increasing current-year taxes. The taxpayer holds $500,000 of the stock in a taxable account (basis $200,000; held 5 years), $250,000 of bond funds in taxable generating $12,000 of interest distributions, and $400,000 in a traditional IRA invested in mutual funds. The taxpayer's goal is to reduce equity exposure by $100,000. Which investment strategy minimizes tax liability for this individual?

A taxpayer is choosing between a traditional IRA and a Roth IRA for $7,000 of annual contributions. The taxpayer is currently in the 24% bracket and expects to be in the 24% bracket in retirement, and will invest in stock mutual funds for growth. The taxpayer also holds taxable bonds generating interest income and dividend-paying stocks in a brokerage account. Which retirement account option provides the best tax advantage given the individual's current tax bracket?