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How the bond mutual fund dividends are taxed?
1 Answer
- Anonymous2 decades agoFavorite Answer
It depends on the type of bond fund that it is. In the U S if the bond fund invests in municipal bonds, the dividend is tax free from federal taxes and possibly from state taxes as well. You will receive at the end of the year a 1099 telling you if any of the dividends are taxable. A bond fund that invests in U S government bonds is tax free from state taxes. A bond fund that invests in corporate or foreign bonds would be fully taxable. Again the 1099 will give you the information of the amount that is taxable. Some of the dividends are capital gains and are fully taxable. Again the 1099 will give you that information