Tax-exempt Security (Noun)
Meaning
A security that is not subject to taxation.
Classification
Nouns denoting possession and transfer of possession.
Examples
- Municipal bonds are a type of tax-exempt security, which makes them attractive to investors looking to reduce their tax liability.
- The new legislation exempted the bonds from federal and state income tax, effectively turning them into a tax-exempt security.
- Tax-exempt securities, such as treasury bills and municipal bonds, offer a way for investors to generate income without having to pay taxes on it.
- By issuing a tax-exempt security, the government agency can borrow money at a lower interest rate and reduce its debt service costs.
- The mutual fund company specialized in tax-exempt securities, providing investors with a way to invest in bonds that are free from federal income tax.