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For municipal bonds purchased at a discount, the de minimis tax rule determines whether the bond’s appreciation at maturity will be taxed at ordinary income or capital gains rates. The de ...
An auction rate security (ARS) typically refers to a debt instrument (corporate or municipal bonds) with a long-term nominal maturity for which the interest rate is regularly reset through a Dutch auction. Since February 2008, most such auctions have failed, and the auction market has been largely frozen.
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.
A general obligation bond is a common type of municipal bond in the United States that is secured by a state or local government's pledge to use legally-available resources, including tax revenues, to repay bondholders. [1]
Here’s a look at the primary risks associated with municipal bonds: Interest Rate Risk. Interest rate risk is one of the key threats to municipal bond investors.. When interest rates rise, the ...
The tax-equivalent yield of a municipal bond is the effective pre-tax yield that you would need to earn to equal the tax-free yield on the muni. If you’re considering investing in muni bonds, it ...
The MSRB was created by the Section 15B of the Securities Exchange Act of 1934 (as amended by the Securities Acts Amendments of 1975, Pub. L. 94–29, and codified at 15 U.S.C. § 78o-4(b)) to create a mechanism for the regulation of municipal securities as well as brokers, dealers, and banks in the municipal securities business.
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 ...