Municipal Bond Forum
Resident of one state, bonds from another
Q
If I live in North Carolina but want to buy a tobacco bond in New Jersey, will my bond still be tax-free in North Carolina?
A
James A. Klotz responds:
Interest from the New Jersey bonds will be subject to North Carolina state tax.
However, you will want to determine how much this reduces the yield. Even after the state tax, the New Jersey bonds may yield more than investment grade bonds issued in North Carolina.
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