I f you’re a savvy investor, you’ve probably diversified among several asset classes.

Strategy: Build taxes into the equation. The differing tax implications for investments can have a significant impact.

Here’s a broad tax overview of eight common investments.

1. Stocks. This is often the “meat and potatoes” of an investor’s portfolio. When you sell stocks, it results in capital gains and losses that can offset each other. Generally, short-term gains are taxed at ordinary income rates currently reaching as high as 37%, while long-term gains for stocks owned longer than one year are taxed at a maximum 15% rate (20% for high-income investors). Excess capital losses offset up to $3,000 of ordinary income before being carried over indefinitely. Tip: Most ordinary stock dividends are taxed at favorable capital gain rates.

2. Mutual funds. Although mutual funds generally provide greater diversification than stocks, the same basic tax rules apply. Typically, a mutual fund will distribute taxable capital gains and dividends during the year. These payouts are currently taxable even if they are reinvested. Also, taxable gains and losses may be realized from sales of mutual fund shares. Tip: It may make sense tax-wise to sell mutual fund shares before the fund declares dividends (i.e., the ex-dividend date) and buy shares after this date.

3. Exchange-traded funds. As opposed to mutual funds, few capital gains are generally realized through ownership of exchange-traded funds (ETFs). Thus, they are considered more tax-efficient than mutual funds. (Some annual dividends are still paid out and subject to tax.) Qualified dividends are taxed at long-term capital gain rates. Otherwise, ordinary income rates apply. Tip: ETFs are often used for tax harvesting

4. Bonds. Interest earned by bonds is taxable annually even if the bond hasn’t matured. There are several types of bonds, including the following: • Corporate bonds. They typically offer a higher rate of return than other bonds at a greater risk. The interest is taxable as ordinary income. • U.S. Treasury bonds. These bonds are backed by the U.S. government. Generally, interest accrues and is taxed when amounts are withdrawn or the bonds mature. • Municipal bonds. The interest on municipal bonds (“munis”) issued by certain government entities is exempt from federal income tax. Tip: Munis bought from your home state may also be exempt from state income tax.

5. Cryptocurrency. Under the latest rules, the IRS treats cryptocurrency as property that’s comparable to securities for federal income tax purposes. Accordingly, if you sell Bitcoin or some other cryptocurrency in 2025, your return will reflect a short-term or long-term capital gain or loss, depending on the holding period. Tip: Cryptocurrency transactions may trigger alarms at the IRS. Keep detailed records.

6. Precious metals. Sales of precious metals like gold and silver result in gains or losses. Unlike most securities, however, any long-term gains are taxed at the 28% rate—not the usual 15% or 20% rate. Similar rules apply to other collectibles like antiques, stamps, coins and sports memorabilia. Tip: Precious metals generally can’t be owned by an IRA.

7. Real estate. The basic capital gain and loss apply to sales of investment real estate. However, homeowners may realize a tax-exempt gain of up to $250,000 ($500,00 for joint filers) on the sale of a qualified principal residence. In addition, investors can exchange like-kind properties without any current tax if certain conditions are met. Tip: Other special rules, including limits on passive activity losses (PALs), may come into play.

8. Certificates of deposit. Have you acquired certificates of deposit (CDs) from banks or credit unions? Annual interest earned by checking and savings accounts is currently taxable. Conversely, CD interest is taxable in the year it accrues. So if you buy a five-year CD, tax is paid over a fiveyear period, unless you cash it in early. Tip: Time CD purchases to your tax advantage.