I live in California. This year I received tax-exempt interest from a variety of municipal bonds. My CA tax form is asking me how much of this interest is from "funds with less than 50% of their assets invested in California and US obligations".
Here's the info on my tax-exempt interest from my brokerage's 1099-INT:
State of residence (CA)
Other states
Two questions:
1) Is the proper amount to report on my CA tax form as "less than 50% tax exempt interest" 4,621 (6299 minus 1678)?
2) Does it matter that these are individual bonds instead of "funds"?
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I figured it out. The line I referred to (Line C) should only have interest from mutual funds. The place I was looking for to enter other CA-taxable interest from muni bonds is actually Line E. Then you add C+E to get the total amount of CA-taxable interest.
If a mutual fund has less than 50% California tax free obligations none of the interest is exempt. If more than 50% then that percent is tax exempt. If an individual bond is not a California tax free investment none of the interest is tax exempt.
I figured it out. The line I referred to (Line C) should only have interest from mutual funds. The place I was looking for to enter other CA-taxable interest from muni bonds is actually Line E. Then you add C+E to get the total amount of CA-taxable interest.
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