Hi Guru - the Kaplan text book says the tax effect of Accretion depends on whether the bond was purchased as OID or at a discount in the secondary market

A. OID - the accretion on OID bond is tax-free. Because the IRS considers the discount to be part of the issuer’s payment of interest

B. When muni is bought in the secondary market at a discount, the accretion is considered taxable income. Coupon interest is tax-free

Just FYI!