The broker has this fund listed as having a cost basis considerably lower than the current share price.
It is supposed to be tax-free; only municipal investments that are tax-free for my state.
What happens if I decide to sell this?
How would I report the cost basis?
If you sell a bond fund and receive a selling price greater than your basis, you have to report capital gain. This amount is not tax-free, even though continuing to hold the fund may allow you to realize the same profit in the form of tax-free interest.