An investor in a country with an original issue discount tax provision purchases a 20 year zero-coupon
Question:
An investor in a country with an original issue discount tax provision purchases a 20 year zero-coupon bond at a deep discount to par value. The investor plans to hold the bond until the maturity date. The investor will most likely report:
A. A capital gain at maturity.
B. A tax deduction in the year the bond is purchased.
C. Taxable income from the bond every year until maturity.
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The correct answer is C Taxable income from the bond every year until maturity An origin...View the full answer
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