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If you own municipal bonds that are issued in the state you live in, the interest income usually is nontaxable income. You may be subject to short-term or long-term capital gains taxes upon sale ...
If you’re in a high tax bracket, investing in tax-free municipal bonds can help reduce your taxable income. The tax-exempt status does not extend to any capital gains from selling the bonds ...
Short-term gains from bonds held for less than a year are taxed at your ordinary income tax rate, while long-term gains from bonds held for more than a year are taxed at a lower rate, typically ...
A municipal bond, commonly known as a muni, is a bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal bonds is often, but not always, exempt from federal and state income taxation.
In 2000 and 2001, people exercised incentive stock options and held onto the shares, hoping to pay long-term capital gains taxes instead of short-term capital gains taxes. [64] Many of these people were forced to pay the AMT on this income, and by the end of the year, the stock was no longer worth the amount of alternative minimum tax owed ...
And if you’re a high-income earner who receives interest, you may also be subject to an additional tax, the net investment income tax, which is a 3.8% tax on interest, dividends, capital gains ...
If we assume a maximum long-term capital gains tax of 23.8%, the tax savings would be $23,800. ... guaranteed income, bonds are attractive. But gains are often reduced significantly by taxes ...
By doing so, you'll avoid paying capital gains taxes on the appreciation. Plus, you can deduct the donation's fair market value on your current year's taxes, assuming you're itemizing deductions ...