Submitted By: someone
Answered: May 5, 2017 8:56 am

I received tax-free interest on municipal bonds. Do I have to report the interest?

While the interest is not subject to income tax, it must be reported on your federal income tax return. If you collect Social Security benefits, the interest is taken into account in determining whether and to what extent the benefits are includible in gross income. And if any of the interest is on private activity bonds, the interest likely is taxable for alternative minimum tax purposes.

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Tax Glossary

Nonrecourse financing

Debt on which a person is not personally liable. In case of nonpayment, the creditor must foreclose on property securing the debt. At-risk rules generally bar losses where there is nonrecourse financing, but an exception applies to certain nonrecourse financing for real estate.

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