Tax-exempt interest, box 9

[Gretel]

Has anyone encountered this yet. The new reporting requirements has two boxes for tax-exempt interest, box 8=tax-exempt interest and box 9=specified private activity bond interest (which is subject to AMT).

My question is in regards to the treatment on state tax returns. Are amounts in box 9 still deemed to be tax-free for state purposes in the state they originate?

Hope I made myself clear.

[BOB W]

I have been........

....... approaching this as, Pr Act Bond is included in the Tax exempt interest and only put that figure on the 6251. I do review the detail of the Tax Free to verify that it is from the state of residence. If it is, I do nothing else, I don't think any futher about State beyond it origin.

[Chief]

Which software do you use?

Gabriele, I believe that question is answered in TS Pro Software.

[Gretel]

Thanks. Chief, I use ProSeries, I know you use TS, so what is your answer according to your software?

[OldJack]

The only thing new is that the numbers are now on the 1099 instead of just on the broker statement. The reported tax-exempt interest (box 8) is exempt for federal but not necessarily exempt from state. The reporter usually provides a chart as to what percent is exempt for each state where the investment was located. And as was stated the private activity bond interest (box 9) is only a number to report on the form 6251.