Tax on Municipal Bond Fund?

[etelle]

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.

[Kaye Thomas]

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.

[Author]

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