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Questions tagged [municipal-bonds]

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confusing returns from bonds

New to bond investment and seek clarification - On Charles Schwab Bond Source chart for fixed income offerings, the followings are listed CD 1yr: 2.6 Muni (AAA) 1yr: 2.71 I assume it meant ...
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Bonds and CUSIPs

Does the CUSIP on a bond change every change? A relative of mine, who lives in the US, has a trade confirmation showing that she bought a municipal bond. The bond was called recently and that trade ...
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For someone who already has enough cash to buy a home, isn't it better to wait and take mortgage when interest rates are high?

Contrary to common wisdom in media the reasons why I think that taking mortgage at higher interest rates may make more sense are that: Almost all mortgages are callable by borrower. Hence, if you ...
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2answers
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Are institutions like UBS limited in what they can buy, does that put the investor at a disadvantage?

I try to help with the finances of family members to make sure they are making wise decisions. I have a family member that is invested with UBS, and they have a financial advisor there that they have ...
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1answer
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Tax Free Zero Coupon Bonds and Taxes

I am an investor in Municipal bonds, including tax free zero coupon bonds. Imagine an investor buys a tax free zero coupon bond at 20 and then keeps the bond for 3 years and sells the bond at 15. He ...
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1answer
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What happens when I buy Continuously-Callable bonds

I am looking at this bond: ILLINOIS ST GO 5% 04/01/2028 Callable (452152K59) Continuously-Callable on 07/04/2017 @ 100.00000 The price of this bond right now is $100.05000 (YTM=4.993%). In ...
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Opportunity to buy Illinois bonds that can never default?

Today Illinois bonds were downgraded to 1 above junk. The article. Citation from article: Despite the lack of a budget, Illinois has continued to cover payments due on its bonds, and, like other ...
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2answers
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Zero Coupon Tax Free Bonds

I live in the United States. I believe that if an investor owns zero coupon tax free municipal bonds,the interest from their bonds must be reported on their tax return using the accrual method. Note ...
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Do bonds make sense as an investment right now?

I live in Ohio in the US and I have a sizable chunk of change tucked away in cash. I think that political and economic conditions are a little to unpredictable. (Ok TBH, when has anything to do with ...
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0answers
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Municipal bonds for married couple in different states

I am living in Michigan (state income tax) and my spouse is living in Washington (no state income tax). We are interested in investing in municipal bonds. From my understanding, in order to take ...
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2answers
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Amending a Tax Return

A certain couple has filed their 2015 tax return and then they got a corrected 1099. The only thing that got changed was the amount of tax free interest they received. Since they are currently on ...
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1answer
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Municipal Bonds and Taxes

A certain investor buys a a Municipal bond for $10,000. He then collects $3000 of tax free interest from the bond and after some time sells the bond for $8000. Does he have a capital loss for tax ...
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3answers
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Basic understanding of bonds, values, rates and yields

I'm looking for a very simplistic (ELI5) explanation of how bonds work, but I'm not sure I have the basics correct. As I understand it, a bond is basically a IOU or loan. Any company, government or ...
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1answer
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Municipal Bond Fund tax risks?

I am looking at Tax-Exempt Municipal Bond Fund as a hassle free investment option. This is the first time I'm looking to invest outside of a retirement account, and having read up on the process of ...
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1answer
126 views

Why aren't muni bond yields driven to the point of indifference?

Why is there any point to munis? By that I mean, why aren't yields driven down to be equal to the after-tax yields of taxable bonds of similar maturities and credit quality? Obviously they are ...
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1answer
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How can I determine if I qualify for a tax exemption on distributions from a municipal bond ETF?

I am interested in two municipal ETFs for my IRA retirement account: NXJ (New Jersey Municipal Bond Fund) and NRK (New York Municipal Bond Fund). I live in New Jersey and NXJ currently has a ...
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2answers
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What do the terms par value, purchase price, call price, call date, and coupon rate mean in the context of bonds?

I am having a hard time understanding municipal bonds. What is the par value vs. purchase price? What is the call date? What is the call price? The coupon rate is just the interest paid out to you ...
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1answer
440 views

Does the Federal Reserve have the power to buy municipal bonds through quantitative easing?

Does the Federal Reserve (or any other central bank in any other country) have the power to buy municipal bonds through quantitative easing? If it does, where would I find out how much?
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What could happen to Detroit Municipal bonds because of Detroit's filing for bankruptcy?

It seems like there's a massive sell off of bonds at this time, such as the municipal bond listed here, for Detroit, Michigan: MunicipalBonds.com – DETROIT MICHIGAN SERIES A - 251093XY1 What ...
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1answer
2k views

Yield of a municipal bond with a sinking fund?

How do I calculate my expected return if I buy a municipal bond at a premium with a sinking fund feature? For example, I'm looking at a bond with a coupon of 5.5%, maturing July 2015, with the ...
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1answer
86 views

Taxation of muni bond bought at a premium

Interest received from municipal bonds is generally tax-exempt at the federal level (and at state level if purchaser resides in the issuer states). Conversely, does this mean that a purchaser cannot ...