Question

Capital gains that are realized upon the sale of a municipal security are:________

I subject to Federal Tax
II exempt from Federal Tax
III subject to State and Local Tax
IV exempt from State and Local Tax
A. I and III
B. I and IV
C. II and III
D. II and IV

Answer 1

A. I and III

Step-by-step explanation:

Capital gains on the municipal securities are taxable at the Federal, State and Local Level. Only the interest income from the municipal securities will be exempted from the Federal income tax.