State & Fed Tax exempt fund - being taxed by TurboTax ?? Fidelity 1099-B

[27Words]

Imported by 1099-Consolidated -DIV -INT -B forms from Fidelity.
We own SMTFX - SIT Minnesota Tax Free Fund - exempt from State and Fed taxes.
The Fidelity import included a 1099-B for a short term sale of SMTFX - the proceeds is being taxed by turbotax no matter what selections I make. 

Frustrated b/c this fund is supposed to be tax free - and therefore a lower return rate than other funds like a money market. 
https://sitfunds.com/minnesota-tax-free-income-fund/ 

Help! 🙂

[guywong · Accepted solution]

The interest income may be tax free, but the capital gain from sale of mutual funds aren't.  The price of SMTFX is not $1, but fluctuates.  So when you redeem any shares, there will be capital gain or loss.

[baldietax]

agree with @guywong a gain on sale won't be tax free; but the dividends on 1099-DIV should be so make sure that is set up, you will need to manually provide the state % information on 1099-DIV interview screens (after the screen with the box amounts)

[27Words]

Thank you... Makes sense.