What are the tax implications of bonds?
Income from taxable bonds is subject to federal, state, and/or local income tax. Tax exempt bonds are usually issued by municipal, county, or state governments and interest payments from these bonds may be exempt from federal income taxes. They may also be exempt from state and/or local taxes if you live in the state where the bond is issued. These exemptions only apply to the interest payments; they do not apply to any gains made from the sale of the bond. Vision highly recommends that each investor speak with their tax advisor before purchasing a municipal bond or taking any other specific action with potential tax ramifications.
