topic Are the capital gains from sale of Vanguard NJ Long Term Tax Exempt Admiral Fund (VNJUX) exempt from New Jersey taxes ? in State tax filing

Are the capital gains from sale of Vanguard NJ Long Term Tax Exempt Admiral Fund (VNJUX) exempt from New Jersey taxes ?

chin29 — Thu, 25 Mar 2021 18:40:54 GMT

Re: Are the capital gains from sale of Vanguard NJ Long Term Tax Exempt Admiral Fund (VNJUX) exem...

ErnieS0 — Fri, 26 Mar 2021 00:02:02 GMT

They appear to be. I suggest calling Vanguard to double check.

Capital gains are exempt from New Jersey income tax if they are from a New Jersey qualified investment fund. A qualified investment fund must:

Be a regulated investment company;
Invest 80% or more of its funds (other than cash or receivables) in securities that are exempt from New Jersey Income Tax; and
Complete and retain Form IF-1, Certification of Qualified Investment Fund, to document its status. This certification does not need to be filed with us, but must be made available upon request.

Related Resource:

Nontaxable Investment Income

Re: Are the capital gains from sale of Vanguard NJ Long Term Tax Exempt Admiral Fund (VNJUX) exem...

chin29 — Tue, 20 Apr 2021 00:58:22 GMT

"Are the capital gains from the sale of Vanguard NJ Long Term Exempt Admiral
Fund (VNJUX) exempt from New Jersey taxes ?"

I got the following answer directly from NJ taxation to the above question:

"If the Vanguard NJ Long Term Exempt Admiral Fund (VNJUX) meets the qualifications of an exempt obligation, the capital gain would not be subject to New Jersey tax. See: https://www.state.nj.us/treasury/taxation/pdf/pubs/tgi-ee/git5.pdf"

Vanguard did not answer the question about whether or not VNJUX is a NJ "Qualified Investment Fund." I assumed that it is since VNJUX invests 80% or more of its funds in securities that are exempt from NJ Income tax.

Are the capital gains from the sale of Vanguard NJ Long Term Exempt Admiral Fund (VNJUX) exempt from Federal taxes? I am assuming that it is not exempt since I could not find anything that specifically exempts it from Federal taxes.

Thanks for all your help- appreciated it.

Re: Are the capital gains from sale of Vanguard NJ Long Term Tax Exempt Admiral Fund (VNJUX) exem...

DMarkM1 — Wed, 21 Apr 2021 16:57:50 GMT

Capital gains from fund trading or redemption of shares is not tax exempt federally. Here is a link to the applicable Vanguard page. See the notes at the bottom of the page.

Backed up the IRS publication here. Capital gains for the sale are taxable interest and dividends earned are not.