Yes, you read that right. Stocks that pay dividends that are free of federal income taxes. For purposes of this list and most of my other stock lists, I consider a stock to be any security that trades on the New York Stock Exchange or American Stock Exchange that is not a bond, a warrant or an option. That means a stock can include closed end funds [CEFs], which most of the stocks on this list are, REITs, oil royalty income trusts, Canadian royalty trusts, etc. The dividends are tax free because the closed end funds on this list own municipal bonds in their portfolio.

The advantages of owning these types of closed end funds over owning municipal bonds directly are greater liquidity, no minimum investment, and greater diversification. In addition, the income from some of these may be exempt from state taxes. Ask your accountant about this and all other tax aspects of these CEFs before investing. A disadvantage is that the CEFs may sell above net asset value.

Here is a list of over fifty that I’ve come up with. I plan to keep adding to it as I find more.

BlackRock Florida Municipal Bond Trust (BIE) 5.5%
BlackRock Florida Municipal Income Trust (BBF) 5.5%
BlackRock Municipal Income Trust (BFK) 5.5%
MFS Municipal Income Trust (MFM) 5.5%
American Municipal Income Portfolio Inc. (XAA) 5.4%
BlackRock Municipal 2018 Term Trust (BPK) 5.4%
BlackRock Municipal Bond Trust (BBK) 5.4%
Colonial High Income Municipal Trust (CXE) 5.4%
Colonial Municipal Income Trust (CMU) 5.4%
Dreyfus Strategic Municipal Bond Fund Inc. (DSM) 5.4%
Blackrock Apex Municipal Fund Inc. (APX) 5.3%
BlackRock Municipal Income Trust II (BLE) 5.3%
Dreyfus Strategic Municipals Inc. (LEO) 5.3%
BlackRock California Municipal Income Trust (BFZ) 5.2%
BlackRock New York Municipal Bond Trust (BQH) 5.2%
BlackRock New York Municipal Income Trust (BNY) 5.2%
DWS Strategic Municipal Income Trust (KSM) 5.2%
PIMCO California Municipal Income Fund (PCQ) 5.2%
Alliance National Municipal Income Fund Inc. (AFB) 5.1%
BlackRock California Municipal Bond Trust (BZA) 5.1%
BlackRock Municipal 2020 Term Trust (BKK) 5.1%
Colonial Investment Grade Municipal Trust (CXH) 5.1%
DWS Municipal Income Trust (KTF) 5.1%
Dreyfus Municipal Income Inc. (DMF) 5.1%
Federated Premier Municipal Income Fund (FMN) 5.1%
ACM Municipal Securities Income Fund Inc. (AMU) 5%
BlackRock New Jersey Municipal Bond Trust (BLJ) 5%
BlackRock New Jersey Municipal Income Trust (BNJ) 5%
Delaware Investments Florida Insured Muni Income Fund (VFL) 5%
Alliance California Municipal Income Fund Inc. (AKP) 4.9%
BlackRock California Municipal Income Trust II (BCL) 4.9%
Colonial Insured Municipal Fund Inc. (CFX) 4.9%
Blackrock Muni Intermediate Duration Fund Inc. (MUI) 4.9%
Federated Premier Intermediate Municipal Income Fund (FPT) 4.9%
Alliance New York Municipal Income Fund Inc. (AYN) 4.8%
BlackRock Insured Municipal Income Trust (BYM) 4.8%
BlackRock New York Municipal Income Trust II (BFY) 4.8%
Eaton Vance Insured California Municipal Bond Fund (EVM) 4.8%
Neuberger Berman Calif. Intermediate Muni Fund Inc. (NBW) 4.8%
BlackRock California Municipal 2018 Term Trust (BJZ) 4.7%
BlackRock Florida Insured Municipal Income Trust (BAF) 4.7%
BR Long Term Muni Adv (BTA) 4.7%
BlackRock New York Insured Municipal Income Trust (BSE) 4.7%
BlackRock Pennsylvania Strategic Municipal Trust Fund (BPS) 4.7%
Colonial California Insured Municipal Fund Inc. (CCA) 4.7%
Morgan Stanley California Insured Municipal Income Trust (IIC) 4.7%
BlackRock New York Municipal 2018 Term Trust (BLH) 4.6%
Delaware Investments Colorado Insured Muni Income Fund (VCF) 4.6%
Eaton Vance Florida Municipal Income Trust (FEV) 4.6%
Western Asset Intermediate Muni Fund Inc. (SBI) 4.6%
Nuveen Arizona Dividend Advantage Municipal Fund (NFZ) 4.6%
BlackRock California Insured Municipal Income Trust (BCK) 4.5%
Delaware Investments Arizona Municipal Income Fund (VAZ) 4.5%
Delaware Investments Minnesota Municipal Income Fund II (VMM) 4.5%
Eaton Vance Insured California Municipal Bond Fund II (EIA) 4.5%
BlackRock Muni NY Intermediate Duration Fund, Inc. (MNE) 4.5%
Insured Municipal Income Fund Inc. (PIF) 4.5%
Investment Grade Municipal Income Fund Inc. (PPM) 4.5%
MBIA Capital/Claymore Mngd. Duration Invest Grade Mun Fund (MZF) 4.5%
BlackRock Maryland Municipal Bond Trust (BZM) 4.4%
Eaton Vance California Municipal Income Trust (CEV) 4.4%
BlackRock Florida Municipal 2020 Term Trust (BFO) 4.3%
BlackRock Virginia Municipal Bond Trust (BHV) 4.3%
First American Minnesota Municipal Income Fund II Inc. (MXN) 4.2%
Minnesota Municipal Income Portfolio Inc. (MXA) 4.2%

By Stockerblog