Defined Asset Funds
Municipal Investment Trusts Pennsylvania Insured 300 Series
Merrill Lynch
Imagine This -- Twelve Times A Year, Uncle Sam Gives Pennsylvanians A Nice
Little Present.
Uncle Sam and the State of Pennsylvania let you keep all of the investment
income you've earned completely free of regular federal tax and Pennsylvania
personal income taxes. Sound too good to be true? Not if you put your money
into Defined Asset Funds Municipal Investment Trusts Pennsylvania Insured
Series.
Over the years, rounds of tax reform have eliminated many of the ways
Pennsylvania residents reduce their tax bill. Municipal bonds have remained a
significant source of tax-free income. For more than two decades, Pennsylvania
investors have been adding balance to their portfolios, while lessening their
tax burden with Defined Asset Funds Municipal Investment Trusts.
A Tax-Free Check Every Month
Defined Asset Funds Municipal Investment Trusts Pennsylvania Insured Series
invest in Pennsylvania municipal bonds that help finance projects such as
roads, schools, water systems and health care facilities. The monthly income
you receive from them is 100% federally and state tax exempt - which means you
keep more of what you've earned.
It's Straightforward and Simple
With Defined Asset Funds Municipal Investment Trusts, your investment is
straightforward. With our Funds, you have the comfort of knowing which bonds
are in the Fund, when they are scheduled to mature, and what you may earn each
month - all before you buy. It's that simple!
"Buy and Hold" For Value
The "buy and hold" philosophy of a Defined Municipal Investment Trust can be
an efficient alternative to investing in an actively managed municipal bond
fund. While every investment has inherent risks, historically municipal bonds
have been considered second in credit safety only to U.S. government
securities. Simply put, active management may not be as necessary for a
Portfolio of quality municipal bonds.
Reduced Risk Through Diversification
Defined Asset Funds team of experienced buyers select a number of bonds for
each Municipal Investment Trust, with an eye toward quality. Holding several
different bonds, instead of just one, helps to diversify your investment and
spread out your risk. Achieving a comparable level of diversification by
buying individual bonds could require an investment many time larger.
You Earn Income Every Month
Our Municipal Investment Trusts distribute annual net income in 12
approximately equal payments - unlike most bonds which pay interest only twice
a year. Your monthly interest payments aren't necessarily affected by changes
in prevailing interest rates. Payments vary somewhat as bonds are sold, called
or mature, or if the Fund expenses change.
Reinvestment Option
Reinvesting helps to compound your income tax-free. You can select to
automatically reinvest your distributions into a separate Portfolio of
federally tax-exempt bonds at no additional sales charge. However, the
reinvestment Portfolio is not insured or fully exempt from Pennsylvania taxes.
The Added Protection of Insured Bonds
The bonds included in the Portfolio are insured. There is a high degree of
credit safety with insured bonds since the insurance guarantees the timely
payment of principal and interest of the bonds in the Fund, but not the Fund
as a whole. This is subject to the insurers' ability to meet their
commitments. Terms of the insurance are more fully described in the prospectus.
Tax-Free Yield vs. Taxable Yield
Find out what a tax-free yield is really worth to you. High yields on many
investments look attractive, but it's what you earn after taxes that counts.
Depending on your income bracket, a tax-free yield may actually be worth more
dollars in your pocket than a higher taxable yield.
The income paid by most Pennsylvania municipal bonds is exempt from regular
federal and Pennsylvania personal income taxes. Units are exempt from
Pennsylvania personal property tax. Some of the income may be subject to
Alternative Minimum Tax (AMT).
To compare the yield of a municipal bond to an investment subject to
Pennsylvania federal income taxes uses the chart below to figure out the
"taxable equivalent yield."
A Comparison of Taxable and Tax-Free Yields
<TABLE>
<CAPTION>
Find Your Reportable Taxable Income:(1)
Then This Is Tax-Free Yield of
Single Return Joint Return Your Tax Rate% 4% 4.5% 5% 5.5%
<S> <C> <C> <C> <C> <C> <C>
$24,000 - 58,149 $40,100 - 96,899 30.02 5.72 6.43 7.14 7. 86
$58,150 - 121,299 $96,900 - 147,699 32.93 5.96 6.71 7.46 8.20
$121,300 - 263,749 $147,700 - 263,749 37.79 6.43 7.23 8.04 8.84
$263,750 - over $266,750 - over 41.29 6.81 7.66 8.52 9.37
</TABLE>
<TABLE>
<CAPTION>
Find Your Reportable Taxable Income
Tax-Free Yield of
Single Return Joint Return 6% 6.5% 7% 7.5% 8%
<S> <C> <C> <C> <C> <C> <C>
$24,000 - 58,149 $40,100 - 96,899 8.57 9.29 10.00 10.72 11.43
$58,150 - 121,299 $96,900 - 147,699 8.95 9.69 10.44 11.18 11.93
$121,300 - 263,749 $147,700 - 263,749 9.65 10.45 11.25 12.06 12.86
$263,750 - over $266,750 - over 10.22 11.07 11.92 12.77 13.63
<FN>
- ------------
(1) Based upon net amount subject to federal income tax after
deductions and exemptions. This table does not reflect other possible tax
factors such as AMT, personal exemptions, the phase-out of exemptions,
itemized deductions and the possible partial disallowance of deductions.
You are urged to consult your tax advisor in this regard.
</TABLE>
To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. This table incorporated
1996 federal income tax rates and assumes that all income would otherwise be
taxable at the investor's highest tax rate. Yield figures are for example only.
Defined Advantage
Professional Selection
Our team of professional buyers is responsible for selecting the bonds for
every Municipal Investment Trust. Only those issues that meet our research
analysts' stringent criteria are included.
Diversification
The Portfolio is diversified among several bond issuers. Spreading your
investment helps to reduce your risk.
Return of Principal
Principal from calls, sales and maturities of bonds in the Portfolio will be
distributed to investors periodically when the amount is more than $5.00 per
unit.
Defining Your Costs
If you buy units within the first 45 days of the initial offering period, all
of your sales charge will be deferred. This means more of your investment
dollars are put to work for you. You'll pay a total of $15 per year for three
years on about $1,000 invested. After three years, there will be no further
sales charges.
You Cash In Your Investment Any Time
Your investment can be sold any time. The price you receive will be based on
the net asset value when you sell, which may be more or less that you paid
initially due to sales charges, market fluctuations and other factors. If you
sell your investment before the anniversary of the Fund, you will pay the
remaining balance of your $45 deferred sales charge (based on a $1,000
investment).
You Could Be Earning Tax-Free Income Right Now!
You can get started right now with as little as $1,000. Get the most out of
your investment and reduce your tax burden by investing in Defined Asset Funds
- - Pennsylvania Insured Trusts. Contacts your financial professional for a free
prospectus containing more complete information on any Defined Municipal
Investment Trust, including all charges and expenses. Read the prospectus
carefully before investing.
Information contained herein is subject to amendment. A registration relating
to the securities of the next series has been filed with the Securities and
Exchange Commission. These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes effective. This
brochure shall not constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in any state in which
such an offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
Other Tax-Free Defined Asset Funds
Municipal Investment Trusts Funds
- -Insured Series
- -Intermediate Series
- -Investment Grade Series
- -National Series
- -State Series
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Printed on recycled Paper
15227BR-11/96
