Shyster1040 wrote:

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Tax Exempt Municipal Bond Funds?

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askalot wrote:

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Tax free interest is reported, but not taxed per se.
However, it is a sneaky way to tax social security. It is
added to other income in determining if you made enough to
cause your social security to be taxed. Tax exempt interest
from private activity bonds also must be added to income for
Alternate Minimum tax purposes. See my blog on taxes at
http://wwwtaxman.blogspot.com

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"askalot" <eliway999[at]hotmail.com> writes:

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Because that's how Congress wrote the law. If you want
to know why, ask them.

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In a sense, yes. But since you have no right to
tax-free income, it doesn't really matter.

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26 USC 86(a) et seq.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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askalot wrote:

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Because Congress said so. They may have said so because
their intent was to increase taxes for wealthy people who
are collecting SSI when they don't really need it. Only the
financially well off get enough of a tax benefit to make it
worthwhile to make significant investments in tax exempt
bonds. Therefore, tax exempt interest is included in the
computation of taxable SSI. Or something else.

- quote -

In effect, yes.

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Sorry but I'm not looking it up. Trust me, though, it is in
the Code.

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"askalot" <eliway999[at]hotmail.com> wrote:

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its how congress taxes your tax exempt income
(don't ask me-I don't write the tax laws)

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > > -----> real address on hobokeni or hobokenx <-----

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"askalot" <eliway999[at]hotmail.com> wrote:

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To get more revenue.

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That's certainly one way to look at it.

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Internal Revenue Code section 86.

--
Phil Marti
Clarksburg, MD

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As to tax-exempt interest, see Code Section 86(b)(2)(B). As
to dividends, what dividends have you received that are
tax-exempt?

As far as this effectively taxing otherwise tax-exempt
income - yes, obviously, but so what? The exemption from
tax was a gift from Congress in the first place, and what
Congress giveth, Congress can take awayeth.

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askalot wrote:

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Sec. 86(b)(2)(B). I'm almost sure it was enacted in PL 98-21
(HR 1900) signed by President Ronald Reagan.

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Why are Tax Free Interest and Dividends included in the
income used to determine the Taxable Amount of Social
Security Benefits?

Doesn't this, in effect, Tax the Tax-Free Income?

Where in the Tax Code is this allowed?

Thanks for any help or explainaton.

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