How does one account for the 'premium" or 'discount' on a treasury note held to maturity for tax purposes? - buying treasury notes
Try this:
Suppose you have a government bond maturing in 6 months for $ 24,800 (nominal value = 25.000) and held until maturity. How is it that the $ 200 as a short-term capital gain to lead the (in 1099) would, or the cash raised interest? Is it still looks like a victory for my state (CA)?
Sunday, January 24, 2010
Buying Treasury Notes How Does One Account For The 'premium" Or 'discount' On A Treasury Note Held To Maturity For Tax Purposes?
3 comments:
The discount will be taxed as ordinary income at line 21 of 1040th This income is the basis of increased costs at face value, excluding short-term gains - but still the report in Appendix D, with no increase. This is passive in its declaration of the state, because the income is not a U.S. Treasury Bonds - The discount is a bond market discount under IRC Section 1276th See IRS Publication capital income.
From my distant memory of the accounting officer class, and my reading IRS Publication 550, I think the premium or discount is used to adjust the amount of recognized interest.
From my distant memory of the accounting officer class, and my reading IRS Publication 550, I think the premium or discount is used to adjust the amount of recognized interest.
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