%0 Journal Article %A Andrew Kalotay %A C. Douglas Howard %A Gauri Goyal %T Practical Applications of The Tax Option in Municipal Bonds %D 2014 %R 10.3905/pa.2014.2.1.061 %J Practical Applications %P 1-3 %V 2 %N 1 %X The Tax Option in Municipal Bonds Andrew Kalotay C. Douglas Howard This article shows how investors can obtain superior results from tax-exempt municipal bonds through active management—as much as 20 to 30 basis points in additional annual return. The Tax Option in Municipal Bonds explores how tax-loss harvesting can be applied to municipal bonds, and provides portfolio managers with a framework for determining how muni bonds perform under such a strategy. “Muni bonds present unique opportunities for tax-loss harvesting,” says co-author Andrew Kalotay , President of Andrew Kalotay Associates , a bond analytics and advisory firm. The article, co-authored by Douglas Howard , Associate Professor at Baruch College in New York, quantifies the collective benefit accruing to investors from tax-loss harvesting over the life of a muni due to the volatility of interest rates.TOPICS: Legal and regulatory issues for structured finance, volatility measures %U https://pa.pm-research.com/content/iijpracapp/2/1/1.12.full.pdf