Asked by Kelley Mcbride on Apr 28, 2024
Verified
For which type of bonds,interest is exempt from state income taxes?
A) Corporate bonds
B) U.S.Treasury bonds
C) Junk bonds
D) Financial institution bonds
State Income Taxes
Taxes imposed on income by individual states, varying in rates and structures, applicable to income earned by residents and, in some cases, non-residents working in the state.
U.S. Treasury Bonds
Long-term government debt securities issued by the U.S. Department of the Treasury with a maturity of more than ten years, offering periodic interest payments to investors.
- Identify the tax consequences associated with different types of bonds.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
B
Explanation :
Interest on U.S. Treasury bonds is exempt from state and local income taxes, making them a tax-efficient investment for residents in states with income tax.
Learning Objectives
- Identify the tax consequences associated with different types of bonds.