web analytics
March 28, 2015 / 8 Nisan, 5775
At a Glance
Blogs
Sponsored Post


Sell These Bonds Before You Make Aliya!


If you’re in a high tax bracket in the United States, you may own some municipal bonds in an effort to minimize your tax bill.

First of all, what are muni bonds? As their name suggests, these are issued by government entities. When you purchase a municipal bond, you are essentially lending a sum of money to the issuer for a set period. Over this time, you receive interest payments and once the bond matures, you are paid back the original sum of money that you invested (presuming that the issuer doesn’t default).

In the United States, the great thing about buying “munis,” as we often refer to municipal bonds, is that some of them are tax exempt, meaning that the income they generate may not liable to federal, state, or even local income taxes (check with your accountant to understand your specific situation).

So what happens if you are a municipal bond holder and you decide to make aliya and move to Israel?

As an Israeli citizen, you are required to report your income worldwide to the Israeli tax authorities, and pay taxes on it. Israel taxes income from municipal bonds because the Israeli government doesn’t recognize the beneficial U.S. tax status that these bonds hold. As of May 2012, the tax rate you would pay on the interest would be 25%. New olim may still enjoy a tax break on all of their investments based on the 10-year tax holiday that they get. However, in many cases, when you move to Israel, you might want to consider selling your municipal bonds, because due to their tax-advantage status, munis tend not to have as high yields as other bonds. If you’re looking for fixed income, consider other types of bonds (such as corporate bonds, treasury bonds, and even bank deposits). As with all investments, there are risks with every type of bond, so be sure to get personalized advice from a licensed professional before investing.

Bond trading can be complicated, but I’ve tried to simplify a few of the important concepts in my article, Premium Bonds Are Not The Opposite of Junk Bonds.

If you are still concerned about what holding a potential oleh (immigrant to Israel) or new oleh should have in his investment portfolio, consult a financial planner with knowledge of the markets on both side of the Atlantic for further advice.

About the Author: Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd, a financial planning and investment services firm located in Jerusalem. He specializes in working with clients who live outside of the United States and want to maintain a U.S. brokerage account. Doug’s newest book, co-authored with Susan Polgar, about how using chess strategies to improve your finances, Rich As A King can be purchased at www.richasaking.com. He is a licensed financial professional both in the U.S. and Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts held at Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. Neither Profile nor PRG gives tax or legal advice. Before immigrating to Israel, it is advisable to consult with a tax attorney who is knowledgeable about Israeli law. Contact at doug@profile-financial.com


If you don't see your comment after publishing it, refresh the page.

Our comments section is intended for meaningful responses and debates in a civilized manner. We ask that you respect the fact that we are a religious Jewish website and avoid inappropriate language at all cost.

If you promote any foreign religions, gods or messiahs, lies about Israel, anti-Semitism, or advocate violence (except against terrorists), your permission to comment may be revoked.

No Responses to “Sell These Bonds Before You Make Aliya!”

Comments are closed.

Current Top Story
Prime Minister Binyamin Netanyahu.
Netanyahu to Release Frozen Palestinian Authority Tax Revenue
Latest Blogs Stories
The Dimona nuclear reactor dome. Iran has been using Israel's reluctance to join the NPT to escape criticism of its own program.

“Israel has nuclear weapons & it isn’t afraid to use them if necessary-Does that frighten you? Good”

JB Flag

American Jews think they know what’s best for Israel-better than Israelis. Here’s my take…

HarHabayitwDome.jpg

An old Arab man yelled at me “You’re stupid!” I returned the compliment; He had murder in his eyes.

Doug Goldstein

Why do people feel the need to check their email 50X a day, constantly dipping in & out of Facebook?

Betar is the world-wide Zionist youth movement that refuses to be silent, and as our founder Ze’ev Jabotinsky wrote: “Silence is despicable.”

Life in Europe’s pre-War Yeshiva world makes today’s rulings look like the Taliban has taken over.

Moshe’s the 1st family member in thousands of years to have the honor of serving in a Jewish army

Often wig wearers become more attractive after marriage. Doesn’t this turn the intent on its head?

US official interference in Israel’s Elections is not only immoral but may be illegal under US law.

The greatest thing about leaving Israel is the joy in returning, hearing/seeing/smelling coming home

I never felt an election resonate so much; I had true existential fear that my candidate might lose

It appears that Agudah has joined with those choosing to erase women from the public sphere.

How can you turn your passion into your business? How can you build your business around your life?

Politicians have their own egos as priority, not the good of the country nor the will of the people

I might have to “reassess” my position on President Obama if his “new positions and comments” on Israel don’t match his pre-election statements.

Find out about peak oil and how the production & sale of cheap oil has affected other oil sources

More Articles from Doug Goldstein, CFP®
Doug Goldstein

Why do people feel the need to check their email 50X a day, constantly dipping in & out of Facebook?

Doug Goldstein

How can you turn your passion into your business? How can you build your business around your life?

Find out about peak oil and how the production & sale of cheap oil has affected other oil sources

How do emotions affect the way that people make financial decisions?

Doug Goldstein talking to … Doug Goldstein

Discussing the mindset of $ and appreciating its value, and how to develop your inner entrepreneur

Why is it necessary to be accountable in business and in life? And how does it differ from guilt?

What are the ramifications of giving up your US citizenship? Would it effect your visiting the US?

Printed from: http://www.jewishpress.com/blogs/goldstein-on-gelt/sell-these-bonds-before-you-make-aliya/2012/05/30/

Scan this QR code to visit this page online: