701—602.5(422) Interest and dividends from federal securities. For franchise tax purposes, dividends received from corporations owned or sponsored by the federal government, or interest derived from obligations of the United States and its possessions, agencies and instrumentalities become a part of the taxable income. Examples of these types of obligations are bonds issued by the governments of Puerto Rico, Washington D.C., Guam and the Virgin Islands. Notwithstanding the above, only interest received after July 1, 1991, from bonds purchased after January 1, 1991, issued by the governments of Puerto Rico, Guam and the Virgin Islands is subject to tax.
Gains or losses from the sale or other disposition of any bonds shall be taxable for state franchise tax purposes.
Interest received on federal tax refunds is taxable for Iowa franchise tax purposes.
This rule is intended to implement Iowa Code section 422.61.
[Editorial change: IAC Supplement 11/2/22]