web analytics
July 29, 2015 / 13 Av, 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

The 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.

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
Obama on Iran Deal
Is Obama a State Sponsor of Terrorism?
Latest Blogs Stories
palestinian children songs

Amongst the Palestinians (sic) what is promoted and praised for its young people? Terror & martyrdom

Peres' 90th Birthday

“If you can’t negotiate with your enemy, why negotiate at all?” Great sound bite. The press loved it

Woman_rabbi

The phenomenon pushing limits of Orthodoxy to the extreme left has no chance of becoming mainstream

Doug Goldstein

Discussing, what should you do if you are feeling overstressed in your job and are tempted to quit?

Considering Esther Pollard’s group mismanaged his case, Pollard’s chances of parole are slim

Detention Camps for US Jews? Sounds farfetched but it did to Japanese-Americans during WW II as well

We asked the soldiers, what will you tell your children you did during the Disengagement?

The Arab terrorist murderer who murdered Malachi Rosenfeld,(HY”D)last month, was an American citizen

The “Stop Iran” rally was a voice of sanity coming from the American people, and directed at Senator Chuck Schumer who holds the keys…

Shalit Deal advocates: “Israel must do whatever it takes” to free Gilad; This proved deadly nonsense

Learn how modern technology can be used to foster personal development in life as well as in finance

Dear CNN: When hypocrisy rules a media outlet, its mandate to call what they do “journalism” expires

With it seems more lives than a cat, I now recognize Hasgacha Pratis is HaShem’s involvement in life

There needs to be clarity about what is & isn’t acceptable in Orthodoxy; That should be the debate.

Obama, Kerry etc are promoting their “deal” like it’s the genuine article, not a cheap “knock-off”

Tony Stubblebine, founder of Coach.me, shares tips on translating desire for change into action

More Articles from Doug Goldstein, CFP®
Doug Goldstein

Discussing, what should you do if you are feeling overstressed in your job and are tempted to quit?

Doug Goldstein

Learn how modern technology can be used to foster personal development in life as well as in finance

Tony Stubblebine, founder of Coach.me, shares tips on translating desire for change into action

Talking about the best ways to give financial advice. Is “storytelling” helpful?

How can you get people motivated in the right way? Discover effective techniques right here.

Learn how discipline helps you reach your potential and the role good habits play in being a leader.

Breakthrough adapts insulin to be taken as a pill instead of shot. Can it be applied to other meds?

What is human chess? How easy is it to predict the actions of others?

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: