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14 Cards in this Set

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Municipal Bond Mutual Funds & Municipal Unit Investment Trust (UTIs)
Federally Tax-Free dividends to Shareholders
Corporate Bond Funds
Dividends are taxable as ordinary income during year investor receives them.
Stock Funds
Dividends taxed at 15%
Long-Term Capital Gains
Taxed @ 15%
Short-Term Capital Gains
Taxed as Ordinary Income.
Fannie Mae/Freddie Mac (Corp)
Taxable at ALL LEVELS
Federal
State
Local
US Gov't Securites
(T-Bills/Notes/Bonds)
Exempt from State and Local

Federally Taxed
Mortgage-Backed Securities
Taxed at ALL LEVELS
Dividend Income
Taxed at max 15% (as long as customer has satisfied a 61-day holding period)
Municipal Securites
Exempt from Federal Taxes

Interest from muni bond/notes are NOT taxable for residents of the state the bond is issued.
Wash Sale Rule
Investor sells a security at a loss & purchases the same security within 30 days before or after the trade date establishing a loss.
Avoiding Wash Sales
Change 2 of the 3:
Issuer
Coupon Rate
Maturity
Accretion
Process of adjusting the cost basis back up to Par.
Inherited Securities
A person dies and leaves securities to heirs, the cost basis to the recipients is the fair market value on the date of the owner's Death.