Advisors can cut clients' taxes with bond swaps

11/5/2013 | InvestmentNews (free registration)

With bond prices suffering in anticipation of rising interest rates, financial advisors have an opportunity to slash clients' tax liability through use of bond swaps. In these swaps, the investor sells bonds or bond-fund assets, a transaction that recognizes a loss, then immediately buys other bonds, unit investment trusts or bond funds. The loss on the sale is paired with a capital gain on the sale of an asset that has appreciated.

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