Income Beginner: Taxes in Bond Investing

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1.
Of the following tax brackets, which one will leave you with the highest yield on a municipal bond compared to a taxable bond?
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35 percent. The higher the tax bracket, the more you earn when the bond is compared to a taxable bond.
2.
Phantom income is taxable income on an inflation-adjusted bond's coupon interest.
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False. Phantom income refers to taxable income on an inflation-adjusted bond's principal interest.
3.
The amount of one's original issue discount interest can be found on Form 1099-OID.
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True. Form 1099-OID exists just for this purpose.
4.
If you are in the 35 percent tax bracket and you are contemplating buying a municipal bond that pays a 7 percent yield, how much will you need to earn on a taxable bond to equal what you will earn on the municipal bond?
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10.77 percent.
5.
Assume that you are in the 32 percent federal tax bracket and you pay a 5 percent state tax. What will be your taxable equivalent yield on a municipal bond earning 4 percent?
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6.19 percent.
6.
If you invested in a series EE bond in 1998, you can keep your initial investment earning interest in a tax-sheltered bond until _______.
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2028. Your series EE bond will earn interest for 30 years.