While Tax-Exempt Bonds Are Not Subject to Income Tax Under

question 6

True/False

While tax-exempt bonds are not subject to income tax under the Internal Revenue Code,they are subject to implicit taxes caused by increased demand driving up the price.

---

Definitions:

AGI

Adjusted Gross Income, which is total income minus specific deductions, used to determine tax liability.

Adoption Credit

A tax credit offered by the IRS to offset some expenses involved in the legal adoption of a child.

Modified AGI

Modified Adjusted Gross Income, an income measure used for tax purposes, adjusting the AGI for specific deductions or exclusions.

Qualified Adoption Expenses

Allowable adoption-related expenses that may be eligible for tax credits, including court costs, attorney fees, and traveling expenses.