State Tax Liability, PA, MD

[SunTaxMan]

PA resident. sold MD Tax Free Bonds. I am thinking the gain on disposition would be exempt to MD resident, but taxable to PA resident. Correct?

Thanks,

[kcjenkins]

TR, I think that it is only the INCOME earned by the bond that is tax exempt, not the value of the bond itself. When selling the bond, normal basis and gain/loss rules would apply to the sale.

[SunTaxMan]

And I think you are correct. Thanks,