In the North Carolina case that artsdoctor shared, Fidelity argues that AMD is tax-exempt because it is "interest" under federal law. North Carolina court didn't agree and case turned on their own construction of what interest means under North Carolina apart from the federal meaning:
"To be sure, 26 U.S.C. § 1276(a)(1) states that, “[e]xcept as otherwise provided in this section, gain on the disposition of any market discount bond shall be treated as ordinary income to the extent it does not exceed the accrued market discount on such bond” and 26 U.S.C. § 1276(a)(4) provides that “any amount treated as ordinary income under [26 U.S.C. § 1276(a)(1)] shall be treated as interest for purposes of this title.” 26 U.S.C. § 1276(a)(1), (a)(4) (2012)."
"To be sure, 26 U.S.C. § 1276(a)(1) states that, “[e]xcept as otherwise provided in this section, gain on the disposition of any market discount bond shall be treated as ordinary income to the extent it does not exceed the accrued market discount on such bond” and 26 U.S.C. § 1276(a)(4) provides that “any amount treated as ordinary income under [26 U.S.C. § 1276(a)(1)] shall be treated as interest for purposes of this title.” 26 U.S.C. § 1276(a)(1), (a)(4) (2012)."
Statistics: Posted by Bogle Learner — Wed Feb 28, 2024 4:53 pm — Replies 23 — Views 1339