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Related to munis: Municipal bonds

Municipal 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 bond to build a new school or a new playground. Municipal bonds are exempt from federal income taxes and sometimes from state and local taxes as well. Municipals usually pay lower coupons than corporate bonds, but because the yield is tax-free, the after-tax basis may be higher for a municipal bond. Risk varies with the municipality and the particular type of municipal bond. It is sometimes called a municipal improvement certificate.


Municipal bond (muni).

Municipal bonds are debt securities issued by state or local governments or their agencies to finance general governmental activities or special projects.

For example, a state may float a bond to fund the construction of highways or college dormitories.

The interest a muni pays is usually exempt from federal income taxes, and is also exempt from state and local income taxes if you live in the state where it was issued.

However, any capital gains you realize from selling a muni are taxable, and some muni interest may be vulnerable to the alternative minimum tax (AMT).

Munis generally pay interest at a lower rate than similarly rated corporate bonds of the same term. However, they appeal to investors in the highest tax brackets, who may benefit most from the tax-exempt income.

References in periodicals archive ?
While changes to the SALT deduction could increase demand for munis from investors in high-tax states searching for tax-deductible investments, many taxpayers may no longer need the deduction because they won't be itemizing deductions due to the doubling of the personal tax deduction, included in both the House and Senate bills.
Munis will help the town streamline workflows by leveraging Munis' integrated financial and utility management applications to create more efficient processes.
Even though a muni might be tax-exempt at issue, investors trading munis in secondary markets may be taxed on their investment in this bond.
As of the end of June, he noted, the spread between investment-grade corporate debt and munis, as measured by Bank of America/Merrill Lynch Bond Indices, stood at only 39 basis points.
The Village of Bensenville, Illinois has a population of around 20,700 and has contracted for Tyler to supply the MUNIS applications as a Software as a Service solution, with Tyler hosting and managing the applications at a secure facility.
A plan that involves new, large issues of municipal bonds would likely damage the market by flooding it with more supply, but a plan involving tax credits for private companies, which has been suggested by Trump, may not necessarily be positive for munis.
After a competitive review, San Juan County chose to partner with Tyler Technologies, which has implemented Munis in several New Mexico jurisdictions.
Treasury bonds and munis pass muster, thanks to yields of 5% or so.