1) Which of the following statement(s) is (are) true regarding municipal bonds? 1.I) A municipal bond is a debt obligation issued by state or local governments. 2.II) A municipal bond is a debt obligation issued by the federal government. 3.III) The interest income from a municipal bond is exempt from federal income taxation. 4.IV) The interest income from a municipal bond is exempt from state and local taxation in the issuing state. A) I and II only B) I and III only C) I, II, and III only D) I, III, and IV only E) I and IV only Please provide an accurate answer with justification.

1) Which of the following statement(s) is (are) true regarding municipal bonds? 1.I) A municipal bond is a debt obligation issued by state or local governments. 2.II) A municipal bond is a debt obligation issued by the federal government. 3.III) The interest income from a municipal bond is exempt from federal income taxation. 4.IV) The interest income from a municipal bond is exempt from state and local taxation in the issuing state. A) I and II only B) I and III only C) I, II, and III only D) I, III, and IV only E) I and IV only Please provide an accurate answer with justification.

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter2: Gross Income And Exclusions

Section: Chapter Questions

Problem 19MCQ

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