Are there any tax implications for shareholders who participate in the tender offer?

Short answer:

The press release announcing the Eaton Vance Municipal Bond Fund’s (EIM) cash tender offer does not contain any specific information about tax treatment for shareholders who elect to sell their shares in the offer. Therefore, any tax consequences will have to be inferred from the general tax rules that apply to the sale of mutual‑fund shares, rather than from any fund‑specific guidance in this announcement.

1. What the news actually tells us

Because the release is strictly a corporate‑action notice, it does not address how the proceeds will be treated for tax purposes.

2. General tax considerations for a cash tender offer on a municipal‑bond mutual fund

Even though the fund’s own announcement is silent on taxes, shareholders should be aware of the typical tax rules that apply when they sell shares of a municipal‑bond mutual fund for cash:

3. Practical steps for shareholders

1. Determine your cost basis

   • Look at your original purchase confirmations and any reinvested distributions.
     
   • If you use a brokerage that tracks basis, verify that the basis shown matches your records.

2. Calculate the potential gain or loss
   
   [
   \text{Gain/Loss} = (\text{Tender price per share} \times \text{Number of shares tendered}) - \text{Adjusted cost basis}
   ]

   • Because the tender price is 98 % of NAV, it may be lower than the market price you could have obtained elsewhere, potentially increasing the chance of a loss.

3. Assess your holding period

   • If you have held the shares > 1 year, you’ll likely qualify for the long‑term capital‑gain rates (or long‑term capital‑loss treatment).
     

4. Consider the wash‑sale rule

   • If you intend to re‑enter the municipal‑bond space shortly after the tender, be aware that a loss realized now could be disallowed if you buy a “substantially identical” fund within the 30‑day window.

5. Plan for reporting

   • Your broker will send a Form 1099‑B after the calendar year in which the tender occurs.
     
   • Use that form (and your own basis records) to fill out Schedule D and Form 8949.
     

6. Consult a tax professional

   • The above are general rules; individual circumstances (e.g., state residency, other capital‑gain/loss activity, participation in a tax‑advantaged account) can change the outcome.
     

4. Bottom line

• The news release itself does not specify any tax consequences.
  
• From a tax‑policy perspective, participating in the tender offer is treated like any other sale of mutual‑fund shares: you will recognize a capital gain or loss based on the difference between the cash you receive (98 % of NAV) and your adjusted cost basis, with the usual long‑term vs. short‑term tax rates and potential NIIT applicability.
  
• Because the offer price is set below NAV, the likelihood of a capital loss is higher for shareholders whose basis is near or above NAV, while shareholders whose basis is well below NAV could still realize a gain.
  

Recommendation: Review your personal cost‑basis records, calculate the expected gain or loss, and discuss the result with a qualified tax advisor to ensure proper reporting and to evaluate whether any strategic timing (e.g., deferring the tender or coordinating with other capital‑gain events) could improve your overall tax position.