Trade24 makes sure to follow all the rules according to Halacha of which one can invest and lend money.
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 firstname.lastname@example.orgThe author's opinion does not necessarily reflect the opinion of The Jewish Press.
If you don't see your comment after publishing it, refresh the page.
Comments are closed.
Why won’t the gov’t finally annex YESHA & Jordan Valley formalizing their status in State of Israel?
Both “Half-Shabbat” & R’ Yosef’s opinion champion an extreme. There most certainly is a happy medium
Trump’s slogan and story gives American restores hope to dream to: “Make America Great Again”
In their attack on Ban Ki Moon, Hamas admitted to committing a different war crime.
The ideal of Modern Orthodoxy should be not be viewed as a compromise the way most Charedim view it.
Israel shouldn’t rely on US; It has an awful record in protecting allies.
The Halacha of shmirat einayim (guarding one’s eyes) is incumbent on the MAN; it’s his obligation
Dem. presidential candidate Doug Shreffler talks about his campaign & its motto “as good as it gets”
I’ve decided to move away from my safety net-and I wouldn’t change that decision for anything.
Was “Jerusalem” the song Matisyahu planned to perform? It was the PERFECT response to BDS campaign
If the world’s winds of hatred bring Jews to Israel we are ready, joyfully offering them a home here
At what age should the realization start setting in for kids that we live in an uncertain society?
Spain’s SeaWorld canceled Zionist-spy dolphin’s performance unless it supports a Palestinian state
Is GDP outdated an measure of prosperity? Are there any alternative methods of assessing $ growth?
How does the Iranian deal affect anti-terrorist legislation adopted by a number of US states?
Why are wealthy people less likely to gossip? So if you get rich you’ll cut down on Lashon Hora!
What has made Israeli innovative startups world leaders in high tech?
Author Gail Reynolds offers great advice for Mom’s wanting to build a business around their families
How can you remove anxiety and worry from retirement planning?
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: