Interest and Capital Gains Are Taxed Differently in the United

Multiple Choice

Interest and capital gains are taxed differently in the United States in that

A) interest is exempt from state and local taxes.
B) interest is taxed as ordinary income, but capital gains are taxed only when realized.
C) interest is taxed as ordinary income, but capital gains are taxed as accrued.
D) capital gains when realized are exempt from state and local taxes.