I think the broker was mistaken. He might be thinking of Illinois. I know for IL taxation, you can only subtract the US Bond interest from actual bonds you own, and not Mutual, or Other mixed bond funds.
But 2024 WI, Schedule SB (for WI subtractions) instructions for line 2 indicates the following:
(I bolded the proper section)
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Line 2 – United States Government Interest
Fill in the amount of interest on U.S. bonds and interest and dividends of certain U.S. government corporations that is included on line 3 of Form 1. This income is not taxable.
A mutual fund may invest in U.S. government securities. If it does, a portion or all of its ordinary dividend may not be taxable by Wisconsin. If a mutual fund advised you that all or a portion of its ordinary dividend is from investments in U.S. government securities, include that portion on line 2.
Caution: Do not fill in on line 2, interest from Ginnie Mae (Government National Mortgage Association) securities and other similar securities which are “guaranteed” by the United States government. You must include interest from these securities in your Wisconsin taxable income."
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....so the 4.6% could be included.
But Repurchase agreements?? I'm clueless.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
