Kathy lives in State A and owns a municipal bond issued by State B.The interest earned on this bond is most apt to be exempt from taxation at which of the following levels?

Question

Quizplus · Accepted Answer

Interest earned on municipal bonds is typically exempt from federal taxes, but it may be subject to state and local taxes unless the bond is issued by the state in which the bondholder resides. Since Kathy lives in State A and the bond is issued by State B, the interest is most likely exempt from federal taxes only.

Kathy Lives in State a and Owns a Municipal Bond