DenverCraig
Dryer sheet aficionado
I had to sell some company stock in a non-retirement account last year. I figured since it was non-retirement (and I'm close to ER) I'd use the proceeds to buy shares of a tax-exempt bond fund, and have that be part of the low-risk part of my AA.
I did that, bought some ABHYX, which pays monthly dividends that are exempt from federal income tax. Nice. HOWEVER, what I didn't think about is state income tax. The fund itself invests in municipal bonds from around the country. Do I have to pay state tax on the dividends? (I think I intended for the dividends to be automatically reinvested, but apparently didn't push the right button when I placed the order). We're not talking huge amounts here, I'm just trying to understand what's what.
Thanks for any help!
I did that, bought some ABHYX, which pays monthly dividends that are exempt from federal income tax. Nice. HOWEVER, what I didn't think about is state income tax. The fund itself invests in municipal bonds from around the country. Do I have to pay state tax on the dividends? (I think I intended for the dividends to be automatically reinvested, but apparently didn't push the right button when I placed the order). We're not talking huge amounts here, I'm just trying to understand what's what.
Thanks for any help!