A tax free zero coupon municipal bond may be an attractive allocation for high bracket investors. Within any investment portfolio, it is wise to continually diversify and allocate a portion of investment activity into lower risk investments. Zero coupon municipal bonds can be of service. What is a Zero Coupon Municipal Bond? Municipal bonds, or [...]
A private purpose bond is one of the two types of municipal bond separated by The Tax Reform Act of 1986. The other type of municipal bond is a public purpose bond which differs quite considerably to the former. The key feature of a private purpose bond is that they are solely used to help [...]
A municipal bond fund is essentially a mutual fund investment in a municipal bond (i.e. “munis”). As we have already covered, municipal bonds are debt securities issued by a municipality, country or state to fund its capital expenditures. The reason why these types of bonds are so popular with investors who have high incomes is [...]
A revenue bond as its rather apt name would suggest is a type of municipal bond that is specifically guaranteed for repayment through revenues generated solely by an entity or source of revenue directly associated with the purpose of the bond. The revenue stipulated in the legal contract established between the bond holder and issuer [...]
A special assessment bond is firstly a type of municipal bond, which as we have covered in previous articles are debt security bonds issued by a state or municipality to finance capital expenditure. Special assessment bonds are used to financially back a development project and the interest is payable to the investors through taxes levied [...]
In essence, the risk of a municipal bond is directly measured by how likely the issuer is to complete all agreed payments in a timely and complete manner. The agreement that was made between the municipal bond issuer and the bond holder defines the specifications of the deal from what quantity of payments must be [...]
Municipal bonds tax rates are considerably different from the typical setup and tax liabilities of other types of investment bonds. The most important aspect of the municipal bond tax band is that they are considered entirely separate from other bonds because they have the ability to offer tax-exempt income from their investments. Breaking this down [...]
Municipal bond issuers are those organisations in charge of distributing bonds in exchange usually for a cash payment. Municipal bonds are issued normally by countries, states and cities within those municipality. You also see agents who act on behalf of those whom the bond directly belongs to. The law governing the issue of municipal bonds [...]
A municipal bond, or “muni” as it is sometimes referred to is a debt security issued by a municipality, country or state to fund its capital expenditures. It’s important to firstly say that municipal bonds are usually exempt from federal taxes and most state and other local taxes. The only consideration however is that you [...]