Content
- What Are Municipal Bonds?
- An Investment For Today's Tax-conscious Investor
- The Advantages of Tax Exemption
- Understanding Yields
- How Safe Are Municipal Bonds?
- Understanding Market Risk
- Understanding Calls
- Gains and Losses
- Bonds With Special Investment Features
- Types of Tax-exempt Municipal Bonds
- Taxable Municipal Bonds
- Other Basic Facts
- The Tax-exempt Municipal Bond Market--How Big and Who Buys?
- Tax-exempt/Taxable Yield Equivalents
- State Taxation of Municipal Bonds for Individuals
- Glossary
40 Broad Street, New York, NY 10004-2373
Washington Office: 1399 New York Avenue, NW, Washington, DC 20005-4711
London Office: St. Michael's House, 1 George Yard, London, EC2V 9DH
www.bondmarkets.com
©1997-2001. All reproduction and other rights reserved.
The printed version of this Guide is available in bulk from
The Bond Market Association's Publications Department.
All information and opinions contained in this publication were produced by The Bond Market Association from our membership and other sources believed by the Association to be accurate and reliable. By providing this general information, The Bond Market Association makes neither a recommendation as to the appropriateness of investing in fixed-income securities nor is it providing any specific investment advice for any particular investor. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and sources may be required to make informed investment decisions.
- Home
- Bond Basics
- Gains and Losses
- Looking for Specific Bonds?
Do you have specific criteria for bonds you're looking for? Let us know and we'll e-mail you bonds that fit your needs. There is no charge for this service.
Gains and Losses
You may generate capital gains on a tax-exempt security if you sell it at a profit in the secondary market before it matures. Long-term capital gains (which require a 12-month holding period) resulting from the sale of tax-exempt municipal bonds are taxed at a maximum rate of 15% for all sales on and after May 6, 2003.
Of course, if you sell your security for less than your original purchase price, you may incur a capital loss. Under current law, up to $3,000 of net capital losses can be used annually to reduce ordinary income. Capital losses can be used without limit to reduce capital gains.
Special rules apply to a tax-exempt bond purchased at a premium or a discount and called or sold before maturity. (Since tax laws frequently change, consult with your tax lawyer or accountant for up-to-date advice.)
