### Question
What is the definition of tax-exempt obligation?


### Answer
The definition of **tax-exempt obligation** is as follows in *26 U.S.C. § 265*:

> any obligation the interest on which is wholly exempt from taxes imposed by this subtitle

#### Citation:
  - *26 U.S.C. § 265*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IX-ITEMS NOT DEDUCTIBLE**

