This seems to be one of the most difficult tax questions to get a straight answer to on the Net.
It should be a simple slam dunk for anyone who has experience with it. But I have seen answers from so-called "experts" that are all over the place. They cannot all be right.
Sometimes the problem is that the question isn't clear. For example, on this post the title refers to both Treasury Bills AND Notes. But the answer may be different for each since a Treasury Bill is an OID instrument and a Note is not. So if you ask the wrong question, or a confusing question, you can get the wrong answer or a confused answer. And there don't seem to be too many people around the Net ... at least those who are willing to volunteer an answer.
I love my CPA but frankly can't be sure of his handling of this without getting some other reliable source second opinion. But so far that seems impossible.
I think the question I have been posting around on different sites is quite clear. But no one seems to know a definitive answer as to whether the accrued market discount is state tax exempt or not... in ANY state or in ALL states.
This is a really frustrating question. Needs someone who has specific knowledge of this topic AND experience filing returns that include such cases, not just any tax "expert."
