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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (19539)10/7/2004 10:23:55 AM
From: Wyätt Gwyön  Read Replies (1) of 110194
 
another ill-formed thought: from a US tax perspective (based on my limited knowledge), the Aussie bond interest is taxed as unearned income, whereas any profits on the futures are split 60/40 long-term/short-term. note that the Aussie govt taxes bond coupons paid to foreigners--i think it's 10%. so to get the tax credit, i hold them in a taxable acct. since i hold them in a taxable acct anyway (due to the unavoidable foreign taxation), ceteris paribus it seems the tax comparison between bond interest and futures 60/40 split would favor the futures. i don't know if the backwardation fully accounts for this potential tax arbitrage.
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