Municipal Bond Forum
Home > Municipal Bond Forum > AMT >
Marginally exempt from the AMT
Q
Some muni bonds are not subject to the Alternative Minimum Tax. If an individual is marginally exempt, how much difference in bond prices would be found when trading exempt vs. non-exempt on average? This appears to be a factor until Congress revises exemptions.
A
James A. Klotz responds:
The difference in yield between AMT and non-AMT bonds would depend on their maturity dates. On long-term bonds, the difference would be approximately 20 basis points. On short and intermediate bonds, the difference could be as much as 35 basis points.
Start here.
Do you have specific criteria for bonds you’re looking for? Let us know and we’ll e-mail you bonds that fit your needs. There is no charge for this service.
The responses provided in this forum are meant to address specific questions posed by investors about their municipal bonds and to provide market insight for our general audience. Please note, your investments, objectives, results and experience may differ significantly. Our answers and any potential strategies discussed should not be construed as a solicitation to buy nor sell any security or investment product. All investing entails risk.