Municipal Bond Forum
Bonds for a non-profit
Q
I volunteer for our group that assists deaf and hearing-impaired federal employees. Because we are non-profit, it seems we could get higher yields from taxable bonds. We pay neither federal nor state taxes and are incorporated in Maryland. Can you tell me which type of bonds we should be looking at?
A
James A. Klotz responds:
Your assessment is correct. If you are paying no taxes on your investment income you will generally receive higher returns on taxable bonds.
Actually, there are taxable municipal bonds that enjoy a 35% subsidy from the federal government and are secured by a municipal issuer. They are called Build America Bonds(BABs). You will find a sample of these securities by clicking on the “Bond Offering” tab on our Web site. One of our bond specialists is also available to discuss the nuances and availability of these securities.
Start here.
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