State & Fed Tax exempt fund - being taxed by TurboTax ?? Fidelity 1099-B

Forum|Forum|11 months ago
April 11, 2025
3 replies
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Imported by 1099-Consolidated -DIV -INT -B forms from Fidelity.
We own SMTFX - SIT Minnesota Tax Free Fund - exempt from State and Fed taxes.
The Fidelity import included a 1099-B for a short term sale of SMTFX - the proceeds is being taxed by turbotax no matter what selections I make.

Frustrated b/c this fund is supposed to be tax free - and therefore a lower return rate than other funds like a money market.
https://sitfunds.com/minnesota-tax-free-income-fund/

Help! 🙂

Best answer by guywong

The interest income may be tax free, but the capital gain from sale of mutual funds aren't. The price of SMTFX is not $1, but fluctuates. So when you redeem any shares, there will be capital gain or loss.

guywongAnswer

baldietax

agree with @guywong a gain on sale won't be tax free; but the dividends on 1099-DIV should be so make sure that is set up, you will need to manually provide the state % information on 1099-DIV interview screens (after the screen with the box amounts)