§1433 Exemption From Taxation; Obligations Acceptable as Credit on Debt of Home Owner

Summary

Certain bank-issued notes, debentures, and bonds (including Federal Home Loan Bank bonds) are free from tax on both principal and interest. They are exempt from federal, territorial, state, and local taxes now or later, except for surtaxes, estate, inheritance, and gift taxes. A bank’s franchise, capital, reserves, surplus, advances, and income are also tax-exempt, but the bank’s real estate is taxed like other property based on value. Banks must accept their own bonds with unearned coupons at face value as payment or credit on a homeowner’s debt.