Tax-exempt dividends represent interest earned by ETFs or mutual funds holding tax-exempt bonds. Thus, the dividends are reported as tax-exempt interest on the federal income tax return (line 2a of Form 1040 or 1040-SR). They are fully tax free for federal income tax purposes, although they are taken into account in figuring the taxable portion of Social Security benefits. However, tax-free interest dividends may receive different treatment on the state tax level (they may be only partially or non-exempt).
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.