I’m doing some writing on mutual fund vs ETFs and tax efficiency.
Most ETFs are taxed as if they were stocks bought at the buying price, sold at the selling price, and delivering dividends at whatever rate the ETF pays out. Easy enough.
Some ETFs are different: GLD is taxed as a collectible.
What about muni bond funds?? Underlying municipal bond interest is tax-free. But if it is transferred to the investor via an ETF dividend payout, does it suddenly become a taxable dividend instead of tax-free municpal interest?
This isn’t relevant for my current project, but I’m curious. A quick google search did not uncover the answer readily, so maybe one of you knows instead???