bond purchase includes interest


M

MZB

I purchased some tax-free bonds. The purchase included some interest
amount. I assume that would not be deductible?

Mel
 
Ad

Advertisements

R

removeps-groups

I  purchased some tax-free bonds. The purchase included some interest
amount. I assume that would not be deductible?
The accrued interest you paid is not deductible. Rather you subtract
it from your next coupon/interest payment. So you receive $600 every
six months and paid $500 accrued interest, then your next interest
payment will be reported as $100 (or rather as $600 and -$500 on the
next line in Schedule B). Also, the person who received the interest
will report the accrued interest as income on their Schedule B.

Also, I think if you bought near the end of the year and the coupon
payment was received the following year, you only subtract the accrued
interest on your next year's tax return. But the person who receives
the accrued interest will report it on this years tax return.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads

Treatment of accrued interest on bond purchases 1
Bond Interest 2
Bond purchase 1
Bond Purchase 5
Canadian Bond Interest 3
Saving Bond Interest ? 1
Entering Bond purchase 3
Include Purchase orders button 0

Top