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I'm not a financial whiz, but I am trying to learn more. I can give you a few thoughts to ponder, but no solid answer. Someone else will have to comment on the REIT tax implications, as I am not aware of them (and not too interested given my real estate holdings provide more than enough exposure to that area).
Tax law changes have made tax deferred accounts less attractive, IMHO. The withdrawals are taxed as ordinary income where both dividends and capital gains in taxable accounts are now taxed at a discount. Therefore I would put the highest expected return, which is the small cap's I think, in the taxable account and take advantage of the discount on taxation.
Another candidate is the INTL fund. If it passes thru foreign tax credits, then those are worthless in the IRA but are a deduction in the taxable fund. It may be that the combination of capital gain treatment and foreign tax credits are a good reason to put it in the taxable account.
It is also subject to use of your crystal ball: What will the tax structure be in 5 to 10 years? I think the current dividend taxation, while well liked, is problematic and will get some tuning. Loaned shares for short sales is one problem, and IRA's are another. I suspect that as more people draw from IRA's and realize the disadvantage of being taxed at full value on capital gains and dividends that were in the IRA, there will be some pressure from seniors and AARP to adjust the treatment. What will happen?
Wayne
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