Taxation on bonds question

Hi…in regards to this question below…I’m not sure why the correct answer choice is “None of these choices” instead of “corporate bond is subject to state and local taxes…”
I do know that Corporate bonds is subject to federal, state, and local taxes…therefore, I selected that answer because it didn’t include “federal” in it…

Maybe I’m overanalyzing the answers?

Hi @LASHY1980!

You found another small error in a question. The corporate bond answer choice should instead say “Corporate bond interest is only subject to state and local taxes”

You’re right - corporate bond interest is subject to all three forms of taxes: federal, state, and local.

This is being updated now! Thanks again for reaching out!

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I’m starting feel that you guys are testing my knowledge, analytical, or spell checking skills lol.

Thanks for the clarification Brandon. :wink:


Thank you for your invaluable feedback!


Hi Brandon…I’m just doing some review questions and came across this question again that you previously updated the wording. But the selection choice hasn’t been updated to reflect that the correct answer choice “Corporate bond interest is only subject to state and local taxation” is the false statement.

Just fyi…

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We’re updating this now. Thanks for pointing it out!!