municipal securities

The term “municipal securities” means securities which are direct obligations of, or obligations guaranteed as to principal or interest by, a State or any political subdivision thereof, or any agency or instrumentality of a State or any political subdivision thereof, or any municipal corporate instrumentality of one or more States, or any security which is an industrial development bond (as defined in section 103(c)(2) ¹ of title 26) the interest on which is excludable from gross income under section 103(a)(1) ¹ of title 26 if, by reason of the application of paragraph (4) or (6) of section 103(c) ¹ of title 26 (determined as if paragraphs (4)(A), (5), and (7) were not included in such section 103(c)),¹ paragraph (1) of such section 103(c) ¹ does not apply to such security.

The term “municipal securities” means securities which are direct obligations of, or obligations guaranteed as to principal or interest by, a State or any political subdivision thereof, or any agency or instrumentality of a State or any political subdivision thereof, or any municipal corporate instrumentality of one or more States, or any security which is an industrial development bond (as defined in section 103(c)(2) 2 of title 26) the interest on which is excludable from gross income under section 103(a)(1) 2 of title 26 if, by reason of the application of paragraph (4) or (6) of section 103(c) 2 of title 26 (determined as if paragraphs (4)(A), (5), and (7) were not included in such section 103(c)),2 paragraph (1) of such section 103(c) 2 does not apply to such security.