### Question
How is the term tax-exempt interest defined?


### Answer
The term **tax-exempt interest** is defined in *26 U.S.C. § 772* as the following:

> interest excludable from gross income under section 103

#### Citation:
  - *26 U.S.C. § 772*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter K-Partners and Partnerships > PART IV-SPECIAL RULES FOR ELECTING LARGE PARTNERSHIPS**

