State muni bond fund - What happens if you move?

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John3754
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State muni bond fund - What happens if you move?

Post by John3754 » Sat May 11, 2013 12:38 am

If you own a vanguard municipal bond fund from your state of residence what happens if you move out of state?

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tfb
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Re: State muni bond fund - What happens if you move?

Post by tfb » Sat May 11, 2013 12:45 am

John3754 wrote:If you own a vanguard municipal bond fund from your state of residence what happens if you move out of state?
Nothing. You still own the fund until you sell.
Harry Sit, taking a break from the forums.

carolinaman
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Re: State muni bond fund - What happens if you move?

Post by carolinaman » Sat May 11, 2013 6:48 am

You will no longer get muni income tax deduction in the state you are resident of for tax purposes. You will still get Federal tax deduction.

Jack
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Re: State muni bond fund - What happens if you move?

Post by Jack » Sat May 11, 2013 2:38 pm

Note that the Vanguard specific state tax exempt municipal bond funds are generally registered for sale only in one state. In the other states, Blue Sky laws prevent the sale of mutual funds that are not individually registered for sale in each state.

For example, a resident of Texas would not be permitted by Vanguard to buy the OhioTax-exempt Fund because Vanguard has not registered the fund for sale in Texas.

So in your case, while you could continue to hold the shares you bought while a resident of the state, you would not be permitted by Vanguard to purchase new shares. Vanguard determines residency from your account registration.

This restriction could be of some concern for trusts because Vanguard uses the address of the trustee for determination of residency. If the trustee has residency in a state that is different from the beneficiaries, the trustee may be prohibited from buying Vanguard state tax-exempt funds that could reduce taxes on distributions to beneficiaries.

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grabiner
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Re: State muni bond fund - What happens if you move?

Post by grabiner » Sun May 12, 2013 10:55 am

If your state exempts capital gains on state muni funds from taxes (some states do and some do not), while your new state taxes capital gains, you should sell the fund before you move if you have a gain, or after you move if you have a loss.
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craiggsean
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Re: State muni bond fund - What happens if you move?

Post by craiggsean » Fri Aug 09, 2019 7:21 am

Is NY muni bond fund expempt from capital gains?

grabiner wrote:
Sun May 12, 2013 10:55 am
If your state exempts capital gains on state muni funds from taxes (some states do and some do not), while your new state taxes capital gains, you should sell the fund before you move if you have a gain, or after you move if you have a loss.

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grabiner
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Re: State muni bond fund - What happens if you move?

Post by grabiner » Fri Aug 09, 2019 6:40 pm

craiggsean wrote:
Fri Aug 09, 2019 7:21 am
Is NY muni bond fund expempt from capital gains?

grabiner wrote:
Sun May 12, 2013 10:55 am
If your state exempts capital gains on state muni funds from taxes (some states do and some do not), while your new state taxes capital gains, you should sell the fund before you move if you have a gain, or after you move if you have a loss.
I didn't see anything in the form IT-201-I (Instructions) saying that NY exempts capital gains on in-state munis, so I would assume they are taxable.
Wiki David Grabiner

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