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Glite Dictionary
tax-exempt security

tax-exempt security

6.5
A bond or note whose interest income is not taxed
  • noun
  • /tæks ɪɡˈzɛmpt sɪˈkjʊrɪti/
  • Specialized
translation icon : valor exento de impuestos
  • Many municipalities issue tax-exempt securities to finance public projects without burdening taxpayers.

Examples

  • Investing in a tax-exempt security can yield higher returns.

  • Many retirees invest in tax-exempt securities to maximize their income after taxes.

  • Municipal bonds are a common type of tax-exempt security popular with investors seeking to reduce their tax burden.

  • The interest earned on this tax-exempt security is not included in your taxable income.

  • Many investors prefer tax-exempt securities for their benefits.

  • Investors often choose tax-exempt securities because the income generated is not subject to federal tax.

  • She decided to include tax-exempt securities in her portfolio to minimize her tax liabilities.

Synonyms

tax-exempt
vstax-exempt security
  • Specialized
6 4.5

A bond whose interest you do not have to pay tax on

is the general notion of exemption from government taxation without naming levels

Surface Forms

tax-exempt security singular
tax-exempt securities plural

Morphology

tax-exempt + security

The phrase is directly compositional: 'tax-exempt' denotes 'free from tax' and 'security' denotes a financial asset, so a B1 learner who knows the constituents can infer it means a financial instrument not subject to tax. This construction follows straightforward adjective + noun composition and has clear parallels in other languages, so its meaning is transparent to learners who know the component words.

Etymology

Tax-exempt security is a plain name: tax is money paid to the government, exempt means 'not taxed', and security is a bond or note. So a tax-exempt security is a bond or note whose interest is 'not taxed', which is why people buy them to keep more income.