Jofina
New Member
Cash: $ 0.65
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Joined: 11 Jul 2011
Location: El monte |
Tax Exempt |
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I have recently purchased a Vangard's tax-exempt bond fund, VWITX. The fund has some holdings of California's munis. Does it mean it's both federal and California's tax-exempt?
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Mon Jul 11, 2011 8:03 pm |
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truitt661
Member
Cash: $ 1.75
Posts: 23
Joined: 28 Jun 2008
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It might be best if you contact the IRS for questions like this. They would be better at assisting you.
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Sat Jul 16, 2011 5:23 pm |
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chrisgayle
Contributing Member
Cash: $ 7.40
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Joined: 11 Jun 2011
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Because of the special tax-exempt status of most municipal bonds, investors usually accept lower interest payments than on other types of borrowing . This makes the issuance of bonds an attractive source of financing to many municipal entities, as the borrowing rate available in the open market is frequently lower than what is available through other borrowing channels.
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Fri Jul 29, 2011 9:23 am |
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oldguy
Senior Member
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Location: arizona |
Not part of your question - but VWITX has 2.73% yield and a 5.7 year duration. If US interest rates go up in the future, you will be exposed to a loss of principal. VG has some 2.5 and 3 yr duration bond funds that have less exposure. Just sayin'.
And whether or not a tax-free bond makes sense depends on your tax bracket. For some of us, it is better to buy the corresponding 4% taxable bond (same grade) and pay the tax.
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Fri Jul 29, 2011 4:29 pm |
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