Series 7 practice questioneasyDebt Securities 77
Interest on Treasury securities is:
- Aexempt from federal income tax
- Btaxable at all levels including municipal surtax only
- Csubject to federal income tax but exempt from state and local tax✓ Correct answer
- Dexempt from both federal and state tax
Explanation
Why C — subject to federal income tax but exempt from state and local tax
Treasury interest is taxable at the federal level. It is generally exempt from state and local income taxation.
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