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Subject:  Tax on municipal bond sales Date:  8/3/1999  2:06 PM
Author:  knepley Number:  17882 of 123001

About 10 years ago my wife invested in a number of municipal bonds (state exempt). Some were zero coupon and some not. My understanding is zero coupon are purchased at a discount price to face value & pay no interest - your "interest" is the difference between what you paid and what you get when you sell. The regular (non zero) bonds are purchased at a nominal face value and pay a semiannual interest payment. When you sell - if the bond market is the same as when you bought, the capital gain is a wash. (Sorry for the tutorial - I'm trying to check my own u