A taxpayer can exclude from gross income any interest earned on bonds issued by any state,any possession of the United States,any political subdivision of either of the foregoing,or of the District of Columbia as long as these bonds are not issued for private activities.

Question

Quizplus · Accepted Answer

This statement is true according to the Internal Revenue Code's exclusion for interest income on certain municipal bonds (section 103). However, there are income limitations and other restrictions on this exclusion that taxpayers should be aware of.

A Taxpayer Can Exclude from Gross Income Any Interest Earned