Tax-free municipal-bond interest isn't subject to the 3.8% tax.
Municipal bond ETFs are nothing new. iShares, SPDR and PowerShares all offer municipal bond ETFs that either focus on particular states, like the iShares California AMT-Free Municipal Bond Fund ETF ( CMF), or provide national exposure to munis, like the Insured National Municipal Bond Portfolio ETF ( PZA) from PowerShares.
Because the life insurance company we used for this analysis has the highest financial strength ratings, our comparison was made with top rated tax-free bond yields.
Banks and advisors have been hawking muni bonds as the next-to-last safe haven, just a notch below Treasuries but with much better yields: as much as 7% tax-free in some muni-bond mutual funds.
But reasonably sophisticated investors can create the same product themselves by purchasing a risk-free zero-coupon Treasury bond and call options on a stock index, such as XSP options traded on the Chicago Board Options Exchange.
If the investor is in the 35 percent marginal tax bracket, then to get the same income from an equally risky bond that is not tax-free would require a gross yield of 3 percent per year.
You can use money that you borrow in order to calculate the deduction but you cannot claim a deduction or credit based on expenses paid with tax-free scholarship, fellowship, grant, or education savings account funds such as a Coverdell education savings account, tax-free savings bond interest or employer-provided education assistance.
Yet many of the REITs still had great value--just as many so-called junk bond companies did when their securities were in a free-fall in 1990.
Until then, avoiding these free-falling bond ETFs, may be the most prudent approach.
Unlike corporate bonds or U.S. Treasuries, muni bond interest is often federal tax-free and exempt from state income tax of the state they are issued.
Bond has enjoyed one of his longest injury-free runs in the past six months.
In this scenario, the bond annuity would provide a known (and risk-free) payout until age 100.
Also, the city now has a bond rating that is investment-grade, which should free up access to tens of millions of dollars for infrastructure improvements.
When you buy a corporate bond, you buy, in essence, the risk-free rate (Treasuries) plus something extra to compensate for the risk that you won't get your money back.
For example, India's stunted corporate-bond market might grow if banks and insurance firms were free to buy more corporate debt and less government paper.
Private plans' use of a bond-based discount rate reflects that higher equity returns are not a free lunch--the firm will be required to cough up extra cash if the assets underperform.
In the South Miami case the SEC zeroed in on a complex bond deal that changed over time in a way that threatened the tax-free status of the securities.
WSJ: Steve Malanga: The Many Ways That Cities Cook Their Bond Books
Bond, as an imagined agent of British culture, is an opportunity for a free-swinging, gun-toting male identity to be linked to a national spirit.
Urbina was free on bond and awaiting trial when he allegedly assaulted and bludgeoned to death 22-year Gabriella Torres.
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