Balloon Amortization Sureties For Tax Purposes In Massachusetts
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FAQ
If the investor chooses to amortize the bond premium, it is done by reporting the amortized premium on the tax return for the first year this election applies. This amount is shown as a negative amount on Schedule B of the tax return and is netted against any other interest income realized during the year.
The entire amount of interest earned on the certificates is includible in your federal gross income. (IRS Letter Ruling 8051033). For Massachusetts income tax purposes there is no deduction for interest and other expenses which are incurred in the production of investment income other than rents and royalties. (L.R.
In addition to the federal income tax relief the bonds provide, under existing law interest on such tax-exempt bonds and any profit made on the sale thereof are exempt from Massachusetts personal income taxes.
Massachusetts - Bank Interest. Interest that qualifies as Massachusetts bank interest may be exempt up to $100, or $200 for married taxpayers filing jointly.
In addition to the federal income tax relief the bonds provide, under existing law interest on such tax-exempt bonds and any profit made on the sale thereof are exempt from Massachusetts personal income taxes.
The following categories of sales or types of transactions are generally exempted from the sales/use tax: Food & clothing. Periodicals. Admission tickets. Utilities and heating fuel. Telephone services to residential users. Shipping and Transportation services. Personal or professional services. Casual and isolated sales.
Interest that qualifies as Massachusetts bank interest may be exempt up to $100, or $200 for married taxpayers filing jointly.
Up to $100 ($200 on a joint return) of interest from savings deposits or savings accounts in Massachusetts banks is deductible from gross income.
Certain government pensions, however, are exempt under Massachusetts law. In general, exempt pensions include contributory pensions from the U.S. Government or the Commonwealth of Massachusetts and its political subdivisions, and noncontributory military pensions.
The investor has the option to accrete the market discount into income each year or recognize it all in the year the bond is disposed of. If the discount is accreted each year – The accreted discount is treated as ordinary interest income and is subject to federal income tax.