Series 7: 6.1.7.4 Types Of Bond Funds

Taken from our Series 7 Top-off Online Guide

6.1.7.4  Types of Bond Funds

Some bond funds are more beneficial from a tax perspective than others. Tax-advantaged funds are suitable for investors with high tax rates. Note that even when interest is tax-exempt at the federal or state level, all capital gains distributions are subject to taxation at all levels (federal, state, and local).

Here is a breakdown of how the interest is taxed on different kinds of bond funds.

Tax Burden of Bond Funds

Taxable at this level?

Type of Fund

Federal

State

Local

Corporate bond funds

Yes

Yes

Yes

Agency-backed MBS and CMO funds

Yes

Yes

Yes

Treasury funds

Yes

No

No

Municipal bond funds

No

Mayb

Since you're reading about Series 7: 6.1.7.4 Types Of Bond Funds, you might also be interested in:

Solomon Exam Prep Study Materials for the Series 7
Please Enable Javascript
to view this content!