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Capital Gains Tax: If you sell your bond before maturity at a profit, you may owe capital gains tax. If you’re in a high tax bracket, investing in tax-free municipal bonds can help reduce your ...
Capital gains taxes come into play when you sell your government bonds before their maturity date. If you sell your bond for more than you paid, the difference could be considered a capital gain ...
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.
If you’re thinking about buying municipal bonds, here are your options.
For market participants who own a bond, collect the coupon and hold it to maturity, market volatility is irrelevant; principal and interest are received according to a pre-determined schedule. But participants who buy and sell bonds before maturity are exposed to many risks, most importantly changes in interest rates.
Municipal bond arbitrage, also called municipal bond relative value arbitrage, municipal arbitrage, or just muni arb, is a hedge fund strategy involving one of two approaches. The term "arbitrage" is also used in the context of the Income Tax Regulations governing the investment of proceeds of municipal bonds; these regulations, aimed at the ...
Municipal bonds, or "munis," are popular investments for a few reasons. Most notably, as a government bond, they can be the closest thing to a safe asset that the market offers. And, investors ...
With proposed legislation to raise income taxes and capital gains taxes circulating in Washington, D.C., municipal bonds have become an attractive option for investors seeking tax-free income and ...
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