17 NCAC 05C .0404 — Sales Or Exchanges

(a) Gain or loss realized on the sale or other disposition of any type of obligation of the United States or its possessions, the State of North Carolina (not exempted by the specific obligation), or its political subdivisions, any other state or its political subdivisions, or of any other government is a taxable transaction and must be included in the computation of a corporation's state taxable income. (b) Gain or loss realized on the sale or other disposition of obligations is not included in taxable income if North Carolina law under which obligations were issued specifically exempts the gain from taxation. 17 NCAC 05C .0405 OBLIGATIONS OF FEDERAL NATIONAL MORTGAGE ASSOCIATION Interest income or other income realized on obligations of Federal National Mortgage Association is taxable income since the obligations are not those of the United States. 17 NCAC 05C .0406 MORTGAGE BACKED CERTIFICATE GUARANTEED BY GNMA Interest paid by the issuer to the holder of a mortgage backed certificate guaranteed by Government National Mortgage Association (GNMA) is not income from an obligation of the United States and is taxable.