Series 7 - General Securities Representative Exam

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An investor holds municipal bonds and his concern is being subject to AMT (alternative minimum tax). Which one of the following Municipal Bonds should he avoid?

GO Bonds
A
Industrial Revenue Bonds
B
TANs
C
Special Assessment Bonds
D

Explanations

The investor should avoid IDRBs. IDRBs are munis that are backed by a corporate lease. Since they MAY be considered non public purpose bonds, the interest MAY be subject to AMT

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