Tax on Municipal Bond Fund?

Home Fairmark Forum Taxation of Investments Tax on Municipal Bond Fund?

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  • #42444
    etelle
    Participant

    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?

    Thanks

    • This topic was modified 4 months ago by etelle.
    #47742
    Kaye Thomas
    Moderator

    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.

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