What is Bond Swapping?

In a bond swap, you sell one fixed-income holding for another in order to take advantage of current market and/or tax conditions and better meet your current investment objectives or adjust to a change in your investment status. Fixed-income securities make excellent candidates for swapping because it is often easy to find two bonds with similar features in terms of credit quality, coupon, maturity and price.

ACAP Trading provides the tools you need to perform a bond swap through our exclusive Bond On-Line Trading System (BOLTS™) platform. Click here to log-in with zero obligations and find a bond swap today.

Why You Would Consider Swapping

  • Increase the quality of your portfolio
  • Increase your total return
  • Benefit from interest rate changes
  • Lower your taxes

How to Avoid a Wash Sale:

You can avoid a wash-sale by changing at least 2 out of 3 of the following security characteristics:

  • The issuer, or name of the security
  • The coupon, or interest rate paid
  • The maturity, or life of bond
  • Short-term losses can only offset short term gains and they are taxed as ordinary income. A short-term bond is defined as having been held for less than 12 months. Long-term losses can only offset long term gains and are subject to any associated long-term taxes. A long-term bond is defined as having been held for more than 12 months.

    IMPORTANT: IRS rules limit the amount of deductions that can be taken and/or offset, and gains and losses must both occur in the same calendar year. However, carry-forward losses may also be available. Losses in a qualified or retirement account may not be used. The information provided here relates only to investment advice and does not replace or serve as professional tax advice. Please consult a qualified tax advisor regarding any questions you may have, as tax implications and benefits vary.

    Contact Us:

    To find out more about our Bond On-Line Trading System (BOLTS™) platform, either call our office at (855) 846-ACAP, fill out our brief contact form or email us at [email protected]