He has $32,000 available in a separate, taxable account to pay the taxes on the conversion.

Saving for college in a taxable account is another option.

For funds held in taxable accounts, it is best to choose a fund with turnover of less than 25 percent.

So do not even consider following the strategy in a taxable account or with any investment that involves high transaction costs.

Investors who hold these funds in taxable accounts must foot the tax bill for those gains.

Still, he acknowledged, the tax plan would make taxable accounts more important.

This equals the dollars of tax that would have been paid on the income if earned in a taxable account.

This way, the fund pays no taxes but rather all the investors in taxable accounts do.

Still, having some of your savings in a taxable account makes sense for several reasons.

But investors in taxable accounts recover only a fraction of what they have lost.