Tax-exempt Bond
Bond whose interest is free of federal, state, or local tax in the state of the issuer. It is typically a municipal bond of estate or county agency. For example, a New York City resident does not pay federal, state, or city tax on the interest received from a New York City obligation. It is triple tax-free though this is not necessarily the case with other states. The return on a tax-exempt bond is equivalent to a higher return on a taxable corporate bond because of the tax savings. The dollar advantage of a tax-exempt security increases as the tax rate rises. Assume a taxpayer in the 31% tax bracket receives 5% on a tax-exempt bond. The equivalent taxable yield on a corporate bond is 7.2%(5%/.69).
Popular Real Estate Terms
Assures that the title is free of any legal claims including encumbrances. It includes covenants of seizin, freedom from encumbrance, express warranties of title, right to quiet enjoyment, ...
The bonus depreciation definition refers to a tax incentive that allows a business to accelerate the depreciation deduction in the year when the asset is purchased and placed into use. The ...
Real rate of interest on a loan. It is the coupon rate divided by the net proceeds of the loan. Assume Sharon took out a $1,000,000, on year, 10% discounted loan to buy real estate. The ...
individual who purchases property for another for the purpose of not identifying to the seller and other interested parties the real identity of the true acquirer. The individual who makes ...
The legal definition of conversion is the act of using property or funds with which one has been entrusted for purposes other than those for which the property was intended to be used by ...
Expiration of a lease or insurance policy by mutual consent of the parties, also to give up. ...
Are you thinking to yourself: What does replacement cost mean?When someone in the Real Estate Market mentions Replacement Cost, they are talking about an evaluation of how much it ...
Individual or entity that divides up a large piece of owned land into smaller pieces generally for the purpose of developing them into homes for sale in the future. ...
Method of using the buyer's down payment on a home as an interest bearing collateralized account to help offset the mortgage amortization process. The home down payment is used to ...
Have a question or comment?
We're here to help.