tax exempt bond

  • Thread starter Michael I. Holzman
  • Start date

M

Michael I. Holzman

I redeemed a State of CT General Obligation Capital
Appreciation Bond in 2004 at full maturity amount. I
received a 1099-B listing the gross proceeds. The bond was
originally purchased at no discount 10 years earlier. Am I
correct in assuming that the difference between the maturity
amount and initial value amount is all tax-exempt interest
in this case, i.e. there is no capital gain because the bond
was not purchased at discount? Also, where do I list this
in my return? On Schedule D with cost basis = sales price
and 0 capital gain? Or as tax-exempt interest in 1040 line
8b? Thanks.
 
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E

ed

If it was a zero coupon bond it WAS purchased at a discount.
But the discount was amortized to maturity and the
amortization is tax free. On schedule D purchase price is
same as maturity price because amortization is added to
basis.

ed
 
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E

ed

If it was a zero coupon bond it WAS purchased at a discount.
But the discount was amortized to maturity and the
amortization is tax free. On schedule D purchase price is
same as maturity price because amortization is added to
basis.

ed
 

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