Question: In 2013 Mrs Ulm paid 80 000 for a corporate bond

In 2013, Mrs. Ulm paid $80,000 for a corporate bond with a $100,000 stated redemption value. Based on the bond’s yield to maturity, amortization of the $20,000 discount was $1,512 in 2013 and $1,480 in 2014. Mrs. Ulm sold the bond for $84,180 in 2015. What are her tax consequences in each year assuming that:
a. She bought the newly issued bond from the corporation?
b. She bought the bond in the public market through her broker?

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  • CreatedNovember 03, 2015
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