In: Categories » Legal and finance » Taxes » Types of securities issued by municipalities
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Municipal securities (or simply munis) aredebt obligations issued by state governments, local governments and entitiescreated by local governments. There are both tax-exempt AND taxable municipal securities,where "tax-exempt" means that interest on a municipal security isexempt from federal income taxation. Capital gains are still subject to federalincome taxation. Whether interest income on a municipal security is tax-exemptat the state and local levels depends on the specific tax laws in each state. Different from Treasury securities, municipal securities have creditrisk. There are basically two types:
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