Question: The interest income on bonds issued by tax exempt organizations
The interest income on bonds issued by tax exempt organizations is often exempt from federal taxation in the United States. In comparing savings vehicles, why is it inappropriate to view these bonds as perfect substitutes for such savings accounts as tax exempt life insurance contracts?
Relevant QuestionsWith constant tax rates over time, why does a single premium deferred annuity contract (SPDA) provide greater after tax rates of return than does a money market account? How is the difference in after tax accumulations in ...Why do rising tax rates make single premium deferred annuities and pension accounts less attractive relative to ordinary money market accounts than when tax rates are falling? A corporation can invest $ 10,000 in preferred stock that pays a 6% dividend and does not appreciate in price. The corporation faces a 40% tax rate. Dividends from the stock are eligible for the 70% corporate dividends ...Equation 3.6 analyzes the choice between a deductible IRA and a Roth IRA for new contributions when the taxpayer wishes to contribute the maximum allowed. Equation 3.6 indicates that if the taxpayer expects his future tax ...What is the effect of dividend imputation on r*c, the required after corporate tax— but before shareholder level tax rate of return? What is the effect of dividend imputation on r*c as k (the percentage of dividends that ...
Post your question