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Series 7: Investment Information & Recommendations
Series 7 practice questioneasyDebt Securities 77

Interest on Treasury securities is:

  1. Aexempt from federal income tax
  2. Btaxable at all levels including municipal surtax only
  3. Csubject to federal income tax but exempt from state and local tax✓ Correct answer
  4. Dexempt from both federal and state tax
Explanation

Why Csubject 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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