contestada

Interest received from which of the following federal agency securities is exempt from all state and local taxation?
A. Fannie Mae Pass Through Certificates.
B. Treasury notes.
C. Federal Farm Credit Funding Corporation Bonds.
D. Federal Home Loan Bank Bonds.

Respuesta :

Parrain

Answer: B. Treasury notes.

Explanation:

Treasury Notes are tax exempt from all state and local taxation but are taxable by the Federal Government with the relevant tax rate being the investor's marginal tax rate.

The amount taxed is the interest received on the note when it matures. The investor can also be taxed on capital gain if they bought the Note at discounted prices and then sold it for more than that.