are municipal bonds tax exempt
Information for the Tax Exempt Bond Community. FY2016 Update: Effect of Sequestration on State & Local Government Filers of Form 8038-CP. Pursuant to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, certain automatic reductions will take place as of October 1, 2015. Some Municipal Bonds are Federally Taxable. The federal government does not tax most activities of states and municipalities, giving most muni bonds tax-exempt status, but some activities do not fall under this tax exemption. IRS announces the Published Volume Cap Limit for applications for allocations of national bond volume limitation authority to issuers of tribal economic development bonds for the period beginning October 1, 2015. TEB Legislation Update: Tax Increase Prevention Act of 2014. The Tax Increase Prevention Act of 2014, Div. Often, in their need to raise funds, state and local governments and 501(c)(3) organizations may sell property financed with tax-exempt bonds. These sales could cause the bond issue to become taxable. This article provides basic information concerning remedial actions needed, if necessary, to preserve the tax-exempt status of the bond issue. ARRA and HIRE Act Bond Guidance. Guidance on bond provisions of the ARRA and HIRE Act. This report produced by the TEB Compliance Practice Research Team seeks to provide aid to issuers of tax-advantaged municipal bonds. It identifies some considerations for issuers of such bonds and is TEB’s initial step toward producing public resource products that assist issuers in avoiding troubled transactions. Tutorial: The Basics Of Bonds. Municipal Bonds can be Subject to Capital Gains Tax. When buying muni bonds on the secondary market, investors must be aware that bonds purchased at a discount (less than par value), will be taxed upon redemption at the capital gains rate. Note that this tax does not apply to the coupon payments, but only the principal of the bond. Municipal bonds issued in the state of New York are exempt from city and state income taxes. Municipal bond interest from bonds issued in the state may be triple tax-exempt from city, state, and federal income taxes. Municipal bonds, or munis, have proved to be a great vehicle for states and municipalities that can receive financing at a low cost, and for investors who can find better after-tax returns for their bond portfolios. One of the advantages of municipal bonds is that they are free of state income taxes. As a general rule in most states, if the bonds are issued in a particular state, they are exempt from that state’s income taxes. For instance, a bond issued by a municipality in New York will be exempt from New York state income tax. Since there are 50 states plus D.C. and territories such as Puerto Rico, the U.S. Virgin Islands, and Guam, it is not possible for us to go over examples involving each state.
No