How to Calculate After Tax Bond Yield
Determine the type of bond.. Use your income tax bracket for bond returns.. Use capital gains tax for gains on trades.
Steps
1
Determine the type of bond.
Determine the type of bond.
2
Use your income tax bracket for bond returns.
Use your income tax bracket for bond returns.
3
Use capital gains tax for gains on trades.
Use capital gains tax for gains on trades.
4
Include any discounts on bonds.
Include any discounts on bonds.
5
Determine the pre-tax yield.
Determine the pre-tax yield.
6
Figure out the tax rate you have paid or will be charged on the bond.
Figure out the tax rate you have paid or will be charged on the bond.
7
Input your data into the after-tax yield equation.
Input your data into the after-tax yield equation.
8
Solve for after-tax bond yield.
Solve for after-tax bond yield.
9
Understand tax-equivalent yield.
Understand tax-equivalent yield.
10
Determine the yield of the untaxed bond.
Determine the yield of the untaxed bond.
11
Calculate tax-equivalent yield.
Calculate tax-equivalent yield.
12
Compare this yield to a taxed security's yield.
Compare this yield to a taxed security's yield.
Comments (0)
No comments yet. Be the first to share your thoughts!