WASHINGTON -- A record number of investors are holding tax-exempt bonds, the Public Securities Association said yesterday after analyzing the income tax figures released last month by the Internal Revenue Service.

The IRS' preliminary data from tax returns fried for 1992, the latest year for which income tax figures are available, showed that the number of taxpayers reporting tax-exempt interest rose to almost 4.5 million, a jump of about 8.8% from the previous year.

Most of these investors had adjusted gross incomes below $100,000, the association said.

Among the taxpayers reporting tax-exempt interest, about 47% had adjusted gross incomes below $50,000 and 30.7% had adjusted incomes between $50,000 and $100,000, the association said.

Higher adjusted gross income categories showed smaller increases.

Only 13% of all taxpayers reporting tax-exempt interest had adjusted gross incomes between $100,000 and $200,000, while 8.7% had adjusted incomes of more than $200,000, the association said.

"These numbers suggest that a wide range and an increasing number of investors are benefiting from the high credit quality and tax advantages of municipal bonds, especially individuals with taxable incomes below $100,000," Heather Ruth, the association's president, said in a written statement.

The number of taxpayers holding tax-exempt bonds has risen in each of the five years from 1987 to 1992, the association said.

In 1987, the first year the IRS compiled such figures, 3.2 million taxpayers reported holding tax-exempt bonds, the association said. The number rose 8.9% from 1987 to 1988, 6.1% from 1988 to 1989, 5.0% from 1989 to 1990, and 5.4% from 1990 to 1991, the association said.

The IRS preliminary data for 1992 includes tax-exempt interest from mutual funds, unit investment trusts, and bonds held in bank trust accounts.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.