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Lev, Tax Advisor
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I sold a large amount of stock recently and was thinking in

Resolved Question:

I sold a large amount of stock recently and was thinking in investing. I've heard different thoughts on whether tax-exempt vs. taxable bonds would be more appropriate. Estimating that I will receive around $130K from my investments each year.
Submitted: 2 years ago.
Category: Tax
Expert:  Lev replied 2 years ago.

Hi and welcome to Just Answer!

As long as stocks were not inside the tax deferred account - you may not defer the tax liability by investing proceeds - regardless of re-investing into bonds or other assets.

Because current interest rate is relately low - bonds might not be the best investment.

Also if interest rate will go up - bond's prices will go down.

See for instance this article - http://forecastsandtrends.com/article.php/805/

From tax prospective - interest paid by individual bonds will be taxed as a regular income - not long term capital gain (as in case of dividends).

However - if bond priced will go down and you will sell bonds - that will be capital loss - which may be used only against other capital gains - and if you have a net capital loss - only up to $3000 may be used to offset other taxable income.

 

Let me know if you need any help.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22754
Experience: Taxes, Immigration, Labor Relations
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