LEARN | Understanding Tax-Equivalent Yield

¹ In most states, interest on in-state municipals is not subject to state or local income tax.

² In most states, interest on out-of-state municipals is subject to state income tax and applicable local income tax.

³ Interest received on U.S. Treasuries is exempt from state and local income taxes.

⁴ Other debt instruments include corporate bonds and loans, debt issued or guaranteed by Ginnie Mae, Fannie Mae, Freddie Mac and other federal agencies that are not backed by the full faith and credit of the U.S. government, and the sovereign debt of other countries, among others. Interest on other debt instruments is taxable as ordinary investment income.

This hypothetical illustration is provided solely to demonstrate the long-term effect of applying mathematical principles to an assumed set of facts. Actual results will differ and could be substantially different.

The Firm does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. Tax laws are complex and subject to change. Investors should always consult their own legal or tax professional for information concerning their individual situation.