Oasis11-I always take advantage of sales like that. I also know that there is an inheritance tax exemption for estates $5 million and under.
This is a recent law because previously there was no estate tax. I also know that investments like municipal bonds are tax exempt because the government wants to encourage people to lend money to state and local governments or municipalities hence the name.
Because of the tax savings many people with higher income invest in these types of bonds because it gives them a comfortable income stream free of taxes.
It is best to invest in general obligation bonds instead of revenue bonds because they are the safest. Also it is a good idea to take a look at each state’s finances before considering the investment.
For example, a Texas municipal bond is much safer than a California municipal bond, because unlike California which is virtually bankrupt, Texas is one of the few states that actually have a budget surplus. The Governor credits this with the incredible low tax rates for the citizens and businesses of Texas.