A $1,000 zero coupon bond matures in five years and sells for $784 to yield 5 percent. The accrued interest for the first year is $39. You are in the 30 percent federal income tax bracket. 

What is tax owed in the interest if the bond is

(a) in your regular personal account or

(b) in your Roth retirement account (IRA)? 

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Answer rating: 100% (QA)

To calculate the tax owed on the interest income we need to consider the tax implications for both a ... View the full answer