How do you report duty exempt interest on zilch coupon municipal bonds-as it accrue annually or upon later life?
Answers: Why do you need to report the interest if it is excise exempt? (well, you still need to report but it is not taxable for regular charge purposes but might be subject to AMT)
Zero coupon muni bonds are exempt from federal tax (at least possible for regular tax, might or might not be exempt for AMT, you want to check with the issuer on that), and within many cases, exempt from state and local taxes too.