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Compare the characteristics of the Current and Deferred Models.
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We do not judge the people we love.

Prentice Hall's Federal Taxation by Kramer
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In the Current Model, only after-tax dollars are invested and the investment earnings are taxed annually. Reinvested earnings grow at the after-tax rate of return. This model is exemplified by a savings account.

Investments in the Deferred Model also are made with after-tax dollars. However, earnings on the investment are not taxed until withdrawn. A nondeductible IRA is an example of the Deferred Model.
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