Sentences with phrase «tax equivalent yield»

Investing Compare taxable / tax - free investment return Tax equivalent yield What is the future value of an annuity?

We like Series I savings bonds for the combination of inflation protection and tax advantages — and the accompanying boost in terms of tax equivalent yield.

The raw yield statistics can be misleading when considering tax implications, where the S&P Municipal Bond High Yield Index has a tax equivalent yield of 9.86 %, far superior to its corporate bond counterpart of 5.26 %.

To determine whether or not a tax - free bond is a better option than a taxable bond, simply apply the Tax Equivalent Yield (TEY) formula.

Tax equivalent yield = tax - free yield / 1 — tax rate.

This traditionally retail - investor - heavy sector has a tax equivalent yield of 4.87 %.

The tax equivalent yield formula is used to compare the yields between a tax - free investment and a taxable investment.

Not exact matches

We believe that long - term tax - free municipal bonds that offer near - 4 % yields (a 6.62 % taxable equivalent at today's top rate and 6.15 % even at the new proposed top rate of 35 %) still offer superior value.

The tax - free yields range from 3.6 % — 4 % for a 20 - year duration, equivalent to a gross yield of 5 % — 5.5 %.

In real, inflation - adjusted, after - tax returns, cash and cash equivalents are experiencing negative yields at the time this article was written.

The tax - equivalent yield will be higher for investors in higher tax brackets.

Today's three choices would provide an after tax (for most taxpayers) yield equivalent to the long term return of the S&P 500.

A $ 810,000 property in SF will generate approximately $ 45,000 a year gross revenue, or $ 33,000 a year after property tax and HOA, equivalent to a 5.6 % gross and 4.0 % net rental yield, respectively.

Currently, BXMT's dividend produces an approximate 8.1 % pretax yield in the current share price and at that level, its tax deduction will provide most individual shareholders in the top bracket in the pretax equivalent of another 90 bps of yield.

Converting this to a TEB (Taxable Equivalent Basis) a non-IL resident in the top tax bracket would need to invest in a corporate bond yielding 7.6 % to match.

Taxable Equivalent Yield: The Taxable Equivalent Yield assumes the maximum regular federal income tax rate and the Medicare tax in effect on January 2018.

That's why they have that tax - equivalent yield, which accounts for the added benefit of tax exemption.

But after considering the impact of taxes, the taxable - equivalent yield (the return required on a taxable bond to make it equal to the return of a tax - exempt bond) of municipal bonds was a full percentage point higher, at 3.75 %, for investors in the highest (37 %) tax bracket.

There is a calculator called Taxable Equivalent Yield Calculator (link below) where if I put in 3 % and 33 % as my tax bracket, I get the result of 4.48 %.

Their tax - equivalent yields are still close to their all - time high.

But factor in munis» tax exemption, and that's a 4.42 % taxable equivalent yield on a 30 - year municipal bond.

An investor must calculate the tax - equivalent yield to compare the return with that of taxable instruments.

Now, it looks a little busy up there, but if you look at the top formula, the tax - equivalent yield equals your muni yield divided by one minus your tax rate.

Here's a cheat sheet of the taxable equivalent yield based on each marginal tax bracket.

* Taxable Equivalent Yield assumes a 39.6 % tax rate.

For a quick example, lets assume a marginal tax rate of 25 % and we want to know the taxable equivalent yield of a municipal bond paying 3 %:

But after considering the impact of taxes, the taxable - equivalent yield (the return required on a taxable bond to make it equal to the return of a tax - exempt bond) of municipal bonds was a full percentage point higher, at 3.75 %, for investors in the highest (37 %) tax bracket.

Municipal bonds can play an important role in an investor's portfolio, offering a higher tax - equivalent yield than many taxable fixed income alternatives, and the potential for portfolio diversification to stocks and other types of bonds.

Well, there's a really simple formula that you can use to calculate a tax - equivalent yield so that you can compare the yields on an equal basis.

Munis provided a higher tax - equivalent yield than most other types of bonds, as of March 31, 2017.

In making the initial decision to purchase a tax - exempt bond you should calculate the taxable equivalent yield to determine if municipals are the right fixed - income investment for your own situation.

If an investor is in this bracket, muni bonds offer a much higher tax - equivalent yield than corporate bonds, 3.5 % compared to 2.8 %.

To answer that question, I added two more columns, each showing the tax - equivalent yield of the municipal bonds yielding 2 %, but at different tax rates.

With this information, an investment in the muni bond with the tax - equivalent 6.54 % yield would be a better investment than a taxable bond yielding, say, 5.25 %.

Take the yield on a muni bond, and adjust it to make it equivalent to a bond that is subject to income tax.

Reported yields for municipal bond funds usually include a tax - equivalent yield.

For example, if an investor buys a muni bond with a 3 % yield and is subject to a 40 % federal income tax rate, the tax - equivalent yield would be 3 % / (1 — 0.4) = 5 %.

An investor in the 35 % tax bracket can calculate the tax - equivalent yield for a tax - free bond yielding, say, 4.25 %:

A common way to do this is to gross up a muni bond's yield by calculating its tax - equivalent yield.

Because of variables in supply and demand, tax - exempt yields in the municipal market can sometimes be quite attractive when compared to their taxable equivalents (see the 2010 Tax Year Tax - Exempt / Taxable Yield Equivalenttax - exempt yields in the municipal market can sometimes be quite attractive when compared to their taxable equivalents (see the 2010 Tax Year Tax - Exempt / Taxable Yield Eqequivalents (see the 2010 Tax Year Tax - Exempt / Taxable Yield EquivalentTax Year Tax - Exempt / Taxable Yield EquivalentTax - Exempt / Taxable Yield EquivalentsEquivalents).

The tax - equivalent yield calculations for these brackets are as follows:

Non-taxable municipal bonds will also have a tax - equivalent (TE) yield determined by the investor's tax bracket.

The tax - equivalent yield takes into account an individual investor's current tax rate to determine whether an investment in a municipal bond is equivalent to a corresponding investment in a given taxable bond.

The tax - equivalent yield is the pretax yield that a taxable bond needs to possess for its yield to be equal to that of a tax - free municipal bond.

An investor's tax rate has a significant difference in the resulting tax - equivalent yields.

See tax - equivalent yield.

If you're in the 25 % tax bracket, this yield is equivalent to 0.67 % in a non-tax exempt money fund.

For example, a tax - free yield of 7 % is equivalent to a taxable yield of 9.7 % for an investor in the 28 % federal income tax bracket, and to a taxable yield of 10.9 % for an investor in the 36 % tax bracket.

Since MLPs do not pay any income taxes and pay out almost all of their cash flow in the form of cash distributions (their equivalent of corporate dividends), MLPs» dividend yields are often higher than corporate dividend payers.

Pricing is likely to be somewhere between a comparable corporate bond and the tax - equivalent yield of a municipal bond.