Interest and Capital Gains Are Taxed Differently in the United

question 25

Multiple Choice

Interest and capital gains are taxed differently in the United States in that

• A) interest is exempt from state and local taxes.
• B) interest is taxed as ordinary income, but capital gains are taxed only when realized.
• C) interest is taxed as ordinary income, but capital gains are taxed as accrued.
• D) capital gains when realized are exempt from state and local taxes.