tax-exempt bond

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Tax-exempt bond

A bond usually issued by municipal, county, or state governments whose interest payments are not subject to federal and, in some cases, state and local income tax.

Tax-Exempt Bond

A bond issued by a local or state government. Municipal bonds are usually used to raise capital for improvements in infrastructure or other aspects of the municipality. For example, a city or school district may issue a tax-exempt bond to build a new school or a new playground. They are called tax-exempt bonds because they are exempt from federal income taxes and sometimes from state and local taxes as well. Tax-exempt bonds usually pay lower coupons than corporate bonds, but because the yield is tax-free, the after-tax basis may be higher for the tax-exempt bond. Risk varies according to the municipality and the particular type of bond.

tax-exempt bond

References in periodicals archive ?
The Tax Exempt Bonds Division is part of the Governmental Entities division of the IRS Tax Exempt and Governmental Entities Division.
Ridley-Thomas said he envisions the city serving as a conduit to issue tax exempt bonds that would be paid off through revenue from the new coliseum and backed by the developers.
The Company is engaged primarily in the business of investing in high- yield, unrated tax exempt bonds, secured by mortgages on multifamily and senior living/health care real estate properties located throughout the U.
Prior funds sponsored by Fidelity Partners have acquired a total of approximately $125 million in tax exempt bonds collateralized by real property.
ATEBT owned four participating tax exempt bonds that bear interest rates of 9%," said Stuart J.
Lakeside North Apartments (360 units) was acquired by the Trust in April, 1994 subject to existing tax exempt bonds totaling $12.
By purchasing the tax exempt bonds, Boston Private Bank passed on the tax savings to CBES in the form of a reduced interest rate.
For example, in 1993, $292 billion tax exempt bonds were issued.
Silver based its assertion on the proposed settlement of the previously disclosed Qui Tam litigation and the loss of principal and income from the call or potential call of certain high-yield, tax exempt bonds, which settlement and loss are described below.
The 30 year tax exempt bonds, which total $5 million, have a weighted average interest rate of 6.
The expected reduction in the supply of newly issued tax exempt bonds has definite implications for investors seeking tax free income.