How BondView’s Tax Valuation Report Can Help with Conditional Puts – Death of Holder

What is a "Conditional Puts - Death of Holder" or "Death Put" in municipal bonds?

Municipal bonds are a popular investment choice due to their tax benefits and stable returns. However, the death of a bondholder can introduce complexities, particularly regarding conditional puts

The term “Conditional Puts – Death of Holder” or “Death Put” refers to an option added to a bond that allows the heirs of a deceased bondholder to sell it back to the issuer at par value. This feature provides the beneficiary with the option to liquidate the investment at face value in the event of the bondholder’s death, in other words, it guarantees that the heirs can sell the bond back to the issuer at face value upon the bondholder’s death, regardless of the current market price. It provides protection from interest rate risk at the time of the bondholder’s death, as higher interest rates will not hurt the value of the bonds at that time.

This feature is intended to make the bonds or CDs more attractive to long-term investors and is often accompanied by a lower interest rate or yield. The death put is not mandatory, and the beneficiary can choose whether to exercise this option or hold.

How BondView's Tax Valuation Report Can Help

BondView’s Tax Valuation Report is a comprehensive tool designed to assist accountants in navigating the complexities of municipal bonds Conditional Puts – Death of Holder. It provides the historical pricing investors and accountants would need to address how to handle bonds efficiently. 

Step-by-Step Guide to Using BondView for Conditional Puts

Accessing and utilising BondView’s Tax Valuation Report is quick and easy but involves a number of steps that ensure a thorough understanding of the municipal bonds.

  1. Navigate to the Tax Season Tool and purchase your report.
  2. Enter Name of Estate Holder
  3. Enter Date of Death
  4. Enter CUSIPS and Quantity: You can add up to 50 bonds
  5. Review CUSIP validation and Generate Report:
    1. CUSIP
    2. Bond Description
    3. Estimated Price
    4. Coupon
  6. Exporting the Report: Once you are happy with the report you can export to CSV, Excel and PDF.
  7. Includes a BondView Account: This allows you to return and review all reports purchased in case the export is lost.

Analyzing Municipal Bond Information Post-Death

When it comes to analyzing municipal bond information post-death, it’s important to consider the cost basis for inherited bonds. For inherited bonds, the cost basis is generally the market value of the bonds at the date of the original owner’s death, known as the “step-up”.

Additionally, municipal securities, including municipal bonds, play an important role in funding public services and infrastructure. They are typically sold in minimum increments of $5,000, pay interest on a semi-annual basis, and have maturities that range from less than one year to 30 years.

Frequently Asked Questions (FAQs) on Conditional Puts

Conditional Puts are introduced to make bonds more attractive to long-term investors. This feature protects heirs from interest rate risk at the time of the bondholder’s death, as they can sell the bond back to the issuer at face value.

The Death Put is not mandatory, and the beneficiary has the choice to exercise this option or hold onto the bond.

The report provides crucial information on market value, historical pricing, estimated pricing and maturity, allowing investors and accountants to determine DIV. and INT. Accruals, aiding in informed decision-making.

Yes, this report can be a valuable tool for estate tax filings, as it can help you determine the value of your bond holdings accurately. Additionally, the report can be used to provide documentation for IRS Form 706 to support your valuations.

No, you do not have to be a BondView subscriber or pay for a membership to access. You pay per Report.

A BondView account is included when you purchase your first report so you can access your purchase history in case the export is lost.

To purchase your first Tax Valuation Report click here. Still not sure whether the report provides the information you need? Download our sample report here