| 0 |
Required or elective |
Effect on cost basis | |
|---|---|---|---|
| 1 | Corporate bonds | Elective | If elected, the cost basis decreases as you recognize amortization. |
| 2 | Treasury bonds or notes | Elective | If elected, the cost basis decreases as you recognize amortization. |
| 3 | Municipal bonds* | Required | Cost basis decreases as you recognize amortization. |
Disclosure Title
Disclosures
Disclosure
*Municipal bonds in this chart are assumed to be general obligation bonds that qualify for the federal exemption. There are also private activity bonds that are exempt from federal income taxation but may be subject to federal alternative minimum tax and may not be exempt from taxation at the state level. If a municipal bond is non-qualified it may be treated as a taxable bond.