Been following the box spread thread, and came to an interesting thought:
I've heard that margin interest on muni's is not supposed to be tax deductible, likely because of "double-dipping" on the margin interest + tax-exempt muni interest.
But - are box spreads considered margin?
If not - seems like an opportunity.. box spread is roughly 3%, a high-quality muni yield is ~3%, but Tax-equivalent yield is likely 5-6% at highest tax brackets.
You'd carry risk of having to re-finance the box spread at some interval - but if the rate goes up, it's also likely the muni rate is going up.
Any further thoughts on this?
A quick search yielded this discussion on ERN, which seems to arrive at a similar conclusion, use box income to go into muni's (see comment from TaxMule): https://earlyretirementnow.com/2021/12/ ... nt-page-1/