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These muni bond funds offer tax-exempt income.Municipal bonds, sometimes referred to as munis, are issued by various government entities such as states, counties and municipalities. 7 Best Tax ...
Also, while the interest income may be tax-free, capital gains from selling municipal bonds are subject to taxation. Additionally, private activity bonds, a type of municipal bond, are typically ...
Muni bonds are a more attractive option for investors in high-tax states and cities, so investors in those areas should be sure to calculate the tax-equivalent yield on potential muni investments.
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.
Positive, tax-free carry can reach into the double digits. The bet in municipal bond arbitrage is that, over a longer period of time, two similar instruments--municipal bonds and interest rate swaps--will correlate with each other; they are both very high quality credits, have the same maturity and are denominated in U.S. dollars.
Tax-free municipal bonds are not just a source of investment but also a significant contributor to public projects such as roads, schools and hospitals. These debt instruments are issued by local ...
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