Flower Bond


DEFINITION of 'Flower Bond'

Fixed income products that were originally purchased by investors at a discount for the purpose of paying federal estate taxes upon their maturity.


Investors would purchase these bonds before their death in anticipation of federal estate taxes. If the bondholder passed away, the bonds would mature at par value and be used as payment for the deceased's federal estate taxes.

Also known as estate tax anticipation bonds, the last of these bonds matured in 1998.

  1. Maturity

    The period of time for which a financial instrument remains outstanding. ...
  2. Bond

    A debt investment in which an investor loans money to an entity ...
  3. Par Value

    The face value of a bond. Par value for a share refers to the ...
  4. Estate Tax

    A tax levied on an heir's inherited portion of an estate if the ...
  5. Estate

    All of the valuable things an individual owns, such as real estate, ...
  6. Taxes

    An involuntary fee levied on corporations or individuals that ...
Related Articles
  1. Retirement

    Bond Basics Tutorial

    Investing in bonds - What are they, and do they belong in your portfolio?
  2. Taxes

    The Purpose Of The W-9 Form

    The W-9 form provides key data your clients need if you're an independent contractor. Just be sure you're not really an employee who should fill out a W-4.
  3. Financial Advisors

    Ditching High-Yield Bonds for Plain Vanilla Ones

    In a low-rate environment, it's tempting to go for higher yield bonds. However, you might be better off sticking with the plain vanilla ones.
  4. Bonds & Fixed Income

    What is an Indenture?

    An indenture is a legal and binding contract between a bond issuer and the bondholders.
  5. Financial Advisors

    Passing an IRA to a Trust: The Good and Bad

    Creating a trust is a common estate planning tactic, but naming a beneficiary to an IRA to a trust may have unintended consequences.
  6. Taxes

    10 Money-Saving Year-End Tax Tips

    Getting organized well before the deadline will curb your frustration and your tax liability.
  7. Taxes

    End-of-the-Year Checklist to Save on Income Taxes

    From grouping related expenses to factoring in the alternative minimum tax, here are some things you need to keep in mind when doing tax planning.
  8. Taxes

    Before You Visit Your Tax Preparer: Do This

    The earlier you start preparing your tax records and documents, the more likely you are to have a smooth tax return experience – and all the tax benefits you're due.
  9. Bonds & Fixed Income

    Credit Default Swaps: An Introduction

    This derivative can help manage portfolio risk, but it isn't a simple vehicle.
  10. Savings

    Fund College for a Grandchild: 529 vs. HEET

    For some grandparents, a HEET is a desirable option for funding their grandchildren's college education. Here's what you need to know about this trust.
  1. What are the maximum Social Security disability benefits?

    The average Social Security disability benefit amount for a recipient of Social Security Disability Insurance (SSDI) in 2 ... Read Full Answer >>
  2. Does the IRS charge interest on penalties?

    The Internal Revenue Service (IRS) charges interest on any overdue taxes owed, but it does not charge interest on penalties. ... Read Full Answer >>
  3. Are tax shelters legal in Canada?

    Most tax shelters are legal in Canada. However, there have been illegal tax shelter scams that the Canada Revenue Agency ... Read Full Answer >>
  4. Can the IRS garnish your tax refund?

    Federal law states that only state and federal agencies, such as the Internal Revenue Service (IRS), are allowed to garnish ... Read Full Answer >>
  5. What is a 409A nonqualified deferred compensation plan?

    A 409A nonqualified deferred compensation plan defers a portion of an employee's compensation to a future date. The compensation ... Read Full Answer >>
  6. How do I calculate the future value of an annuity?

    When planning for retirement, it is important to have a good idea of how much income you can rely on each year. There are ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  2. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  3. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  4. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  5. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
  6. Discount Bond

    A bond that is issued for less than its par (or face) value, or a bond currently trading for less than its par value in the ...
Trading Center