Whether they pay regular interest or whether you cash them in, investments add to your income, which can add to your tax burden. The taxation of investment gains can be an extremely complex subject, and the more complicated your portfolio, the more likely it is that you'll need expert tax advice. Here are a few basic things to be aware of.

Capital gains or not? In order to encourage investment, the government taxes capital gains at a lower rate if you hold them for a certain period. But not all accrued value is capital gains. For instance, even though you might buy a zero coupon bond at a discount and redeem it for much more money, the increased value is interest, not capital gains, and is usually taxed as regular income.

Tax breaks — Some investments, especially funds set up for retirement, provide several ways to shelter your money from taxation. Tax-deferred investments allow funds to build up tax free in your investment; you pay taxes on your earnings only when you take them out as cash. Other plans permit pre-tax investment, i.e., the amount of your income you invest is not subject to current tax. Still others permit you to deduct a portion of your invested funds from your income for tax purposes.

Regulations — Knowing the current state of the tax code regarding investment earnings is a full-time job. With some investments, you must pay tax on your earnings, even though you haven't actually received it. In some instances, a portion of your earnings will be taxed one way, another portion in a different way. You should seek tax advice from a tax professional.

Making the right tax strategy decisions can keep you or your heirs from losing a portion of your investment value to taxes.

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