Which One of the Following Statements Concerning the Tax Treatment

question 124

Multiple Choice

Which one of the following statements concerning the tax treatment of municipal bonds is correct?

• A) The interest income on municipal bonds is subject to federal income tax.
• B) The capital gain realized on the sale of a municipal bond is tax-free income.
• C) Interest income on a municipal bond is usually exempt from state and local income taxes if the bond is issued by the state or locality in which the investor resides.
• D) Municipal bonds receive no special income tax treatment.

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Definitions:

Twin Compounds

Innovative materials or tires that use two distinct rubber compounds to offer a balance between grip, durability, and performance.

Main Section

The principal or most important part or segment of a document, machine, or area.

All-Wheel Drive (AWD)

A term used to describe a vehicle drive configuration used to drive more than one axle in pickup trucks and automobiles but usually describes a three-axle drive system in heavy-duty trucks.

Four Axle Truck

A heavy-duty truck configuration featuring four sets of axles, increasing load capacity and distribution.