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What are the tax considerations associated with MLCDs?

An investor in MLCDs is subject to federal income tax rules. You may have to pay income taxes each year on calculated annual income based on a comparable yield provided by the issuing bank, even though you may not receive a cash payment until maturity.

In addition, any gains or losses realized upon the sale of the MLCD prior to maturity may be treated as ordinary income. For full details, please read the MLCD offering circular of any investments you choose to make and consult your tax advisor for more details.