Sentences with phrase «taxes on bond yields»

Not exact matches

Looking ahead, we may see rising yields along with a continued focus from the government on tax reform, and such a move could hurt the relative attractiveness of muni bonds.

In addition to the positive technical element I mentioned earlier, the potential removal of the alternative minimum tax could cause AMT paper to trade closer to the yield on other municipal bonds.

Speaking of the Treasury, they've got to pretty massively increase the supply of bonds to the market to fund the deficits induced by the tax cut and spending bill, which puts downward pressure on bond prices and upward pressure on yields.

Finally, tax - exempt bonds are offering compelling yields relative to taxable instruments of the same maturity, based on my analysis of the Bloomberg data.

Because the changes in tax law may not affect all investor classes equally and may be different depending on the state in which the investor is located, the effect of these changes on demand for tax - exempt bonds and required investor yields is still being determined.

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.

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

Higher Credit Quality, Lower Volatility and Comparable Yields Preferreds have significantly higher credit quality than high yield bonds, have exhibited lower volatility and can offer similar yields with potential tax advantages on income as some preferreds providYields Preferreds have significantly higher credit quality than high yield bonds, have exhibited lower volatility and can offer similar yields with potential tax advantages on income as some preferreds providyields with potential tax advantages on income as some preferreds provide QDI.

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.

This meant that municipal bonds, which typically yield less than Treasuries before tax, began to offer yields higher or comparable to federal government debt on a pre-tax basis.

It's important to compare investments on an after - tax basis: you might appreciate the guaranteed yield of government bonds, but on an after - tax basis, you'll likely do better over the long - term with dividend stocks.

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

Yield: Investment grade tax - exempt municipal bonds on average are yielding 2.03 % vs. higher yielding taxable investment grade corporate bonds.

The S&P Municipal Yield Index is designed to measure the performance of high yield municipal bonds issued by U.S. states, The District of Columbia, U.S. territories and local governments or agencies, such that interest on the securities is exempt from regular federal income tax, but may be subject to the alternative minimum tax and to state and local income tYield Index is designed to measure the performance of high yield municipal bonds issued by U.S. states, The District of Columbia, U.S. territories and local governments or agencies, such that interest on the securities is exempt from regular federal income tax, but may be subject to the alternative minimum tax and to state and local income tyield municipal bonds issued by U.S. states, The District of Columbia, U.S. territories and local governments or agencies, such that interest on the securities is exempt from regular federal income tax, but may be subject to the alternative minimum tax and to state and local income taxes.

Your yield, maturity and quality of bond will be the same as before, plus you will have realized a loss that will save you money on taxes in the year of the bond sale.

The Tax - Exempt / Taxable Yield Equivalents table will help you determine the amount of income you require from a taxable investment to equal the yield on a tax - exempt boTax - Exempt / Taxable Yield Equivalents table will help you determine the amount of income you require from a taxable investment to equal the yield on a tax - exempt Yield Equivalents table will help you determine the amount of income you require from a taxable investment to equal the yield on a tax - exempt yield on a tax - exempt botax - exempt bond.

And this is made clear when bond yields began climbing after the U.S. Senate's tax plan was revealed but the yen held its ground and only grudgingly weakened on some pairs, very likely because disappointment over the U.S. Senate's version of the tax plan

The bottom line: A focus on yield is important but it is actually what we get to keep after taxes that helps keep tax - exempt municipal bonds showing their value in this market.

If we consider two scenarios (2 % bond yield, 2 % inflation and 10 % bond yield, 8 % inflation) with tax on interest at 50 %, here's how it works out: Scenario 1: 1 % bond yield after tax.

This is very rare, but when it happens, it leaves a lot of very unhappy investors; their coupon payments are taxed as ordinary income and, if they choose to sell the bond, the price they receive will be reduced because buyers would require a higher yield on a taxable bond.

If munis will give you a higher tax - equivalent yield, you might be tempted to purchase a muni fund that focuses on bonds from your state, so the interest is exempt from state as well as federal taxes.

So, when looking at a muni bond offered for sale on the secondary market, the investor must look at the price of the bond, not just the yield to maturity, to determine whether tax consequences will affect the return.

Historically, municipal bonds would yield roughly what Treasuries were yielding on a tax adjusted basis but bargains presented themselves in 2009, especially in light of the unprecedented near zero yields we saw on Treasuries.

Last November I got a couple of issues of my state's AA and AAA municipal bonds at yield - to - maturity of 5.3 %: tax free coupon rate of 5 % on one and 5.25 % on another, but I bought below par.

The taxable bonds should have a higher yield than tax - free munis and, because you're buying them in a retirement account, you don't have to worry about paying tax each year on the interest generated.

Third, before taxes, the yields on preferred shares tend to be pretty similar to those of long - term bonds for the same company, says preferred shares expert James Hymas, president of Hymas Investment Management in Toronto.

And as rates continue to move up, yields on tax - free bonds — even for those in the lowest tax brackets — will become more attractive.

I won't say tax - free bonds have a cult following among investors, but readers sometimes tell me they so deeply hate to pay taxes that they don't care if the after - tax yield on a taxable alternative would be to their advantage.

The fiscal problems of state and local governments are well known, and the parlous state of municipal budgets has led to very high yield spreads on all tax - exempt bonds.

Yields on municipal bonds are often lower than corporate or Treasury bonds with comparable maturities, because they have important tax - free advantages.

November's bond market action was dominated by the political arena and the constant back and forth on the proposed tax bill and the consequences for the economy, inflation and bond yields.

These sheets calculate the (annual) figures for: • Accrued interest that needs to be returned to the seller after settlement • Net bond basis • Original discount or premium • Annual (pro-rated) amortization of bond premium using both Constant Yield and Straight Line amortization, as required by the IRS • End - of - year basis • Annual coupons • Estimates of taxes due on coupons • Estimates of differences in taxes paid vs. not amortizing premiums • Capital loss or gain upon sale before maturity

In other words, how much taxable yield you'd need to get on a municipal bond to end up with the same amount of money as you'd get on a federally - tax bond of the same maturity and credit quality.

The yield on the 10 - year Treasury note — a bedrock of global financial markets — has been rising since tax legislation was proposed in the fall of 2017, and the yield reached a four - year high of 2.85 % on the day the jobs report was released.6 — 7 Although the Tax Cuts and Jobs Act was generally welcomed on Wall Street, bond traders have been concerned that increased Treasury sales to pay for the $ 1.5 trillion tax cuts will erode bond prictax legislation was proposed in the fall of 2017, and the yield reached a four - year high of 2.85 % on the day the jobs report was released.6 — 7 Although the Tax Cuts and Jobs Act was generally welcomed on Wall Street, bond traders have been concerned that increased Treasury sales to pay for the $ 1.5 trillion tax cuts will erode bond pricTax Cuts and Jobs Act was generally welcomed on Wall Street, bond traders have been concerned that increased Treasury sales to pay for the $ 1.5 trillion tax cuts will erode bond prictax cuts will erode bond prices.

In other words, how much federally - tax yield you'd need to get on a municipal bond to end up with the same amount of money as you'd get on a taxable bond of the same maturity and credit quality (after paying the taxes due).

The majority of global equity markets have posted negative returns, bond yields are near record lows, the loonie has fallen to levels not seen in over 11 years, and, to top it all off, there are some steep tax hikes on the immediate horizon.

Even if municipals deliver a higher after - tax yield than taxable bonds, they aren't necessarily your best bet, as we discuss in the chapter on taxes.

Taxable bonds — such as those issued by corporations — typically have relatively high yields, but you have to pay tax each year on the interest you earn, assuming you hold the bonds in a taxable account.

However, strip bonds always trade at discounts, so tax is paid only on an amount equal to the yield to maturity.

This was when stock markets were averaging 15 % annually, 3 % GDP growth was considered a bad year, government bonds yielded between 5 % and 10 %, the highest marginal tax rate on ordinary income was ~ 70 %, just about the only way to invest was to pay a full - service stockbroker over 5 % commission to buy a stock or a mutual fund, and inflation was averaging 4 % to 8 % annually.

Long - term interest rates, like the yield on 10 - year U.S. Treasury bonds, had already risen by about 100 basis points in November, as the financial markets responded to the victory of President - elect Donald Trump, and his promises of tax cuts and a $ 1 trillion infrastructure program.