Hoosier Banker 37 Example 3 – OID Bond Purchased Above the Revised Issue Price Issue Price: $60 Revised Issue Price: $65 Purchase Price: $70 The purchase price of $70 is greater than the revised issue price of $65, so the entire discount is attributable to the OID and is treated as interest. Increasing yield levels may create complicated tax scenarios for some municipal bonds, but the after-tax yields will often remain attractive to investors. To help bankers make sense of this, municipal offering sheets provide a true yield in the tax-equivalent yield (TEY) section for discount bonds. As shown in Exhibit 2, the true yield is after the tax consequences of the discount, but before the normal TEY adjustments. Investors should consider all tax implications when making investment decisions, including any taxes unique to a specific situation. HB Strengthening Community Financial Institutions shazam.net/epic | 855.314.1212 | @SHAZAMNetwork SHAZAM’s focused on strengthening community financial institutions by offering choice and flexibility for all your needs including core services and more. Call us today to learn more about SHAZAM. Now that’s epic. I HAVE NO CHOICE OR FLEXIBILITY! I’M SICK OF IT! WILL THEY HAVE MY BEST INTERESTS IN MIND AND GIVE ME THE ATTENTION I DESERVE? I DID HEAR THEIR NOT-FOR-PROFIT CULTURE SETS THEM APART FROM OTHER PROVIDERS! AND, THEY OFFER A CORE SOLUTION THAT PROVIDES EXCEPTIONAL VALUE FOR AN ALL-INCLUSIVE PRICE AND A HIGH LEVEL OF FLEXIBILITY SO WE CAN SELECT THE APPLICATIONS WE WANT TO USE. NOW THAT'S... MAYBE WE NEED A NEW FINANCIAL SERVICES PROVIDER – LIKE SHAZAM. Exhibit 2
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