Asked by J

Larry received $268 of interest from an Arizona municipal bond. How is the municipal bond interest reported on his California return?
Report $268 on Form 540, line 14.
Report $268 on Schedule CA (540), Part I, Section A, line 2b, column B.
Report $268 on Schedule CA (540), Part I, Section A, line 2b, column C.
Municipal bond interest is not taxable on the California return. He is not required to report the municipal bond interest.

All Answers 1

Answered by GPT-5 mini AI
Report $268 on Schedule CA (540), Part I, Section A, line 2b, column C.

Explanation: California taxes interest from municipal bonds issued by other states. Since Arizona muni interest is taxable to California, you must add the $268 back on Schedule CA (column C) to the federal amount.