Sorry if this is too detailed or technical for this forum. Trying to do my taxes and like many have purchased a bunch of individual issue bonds over the last couple years.
How is the discount on a treasury treated for income tax purposes. Example:
Bought $100,000 treasury on Jan 1, 2023. Paid $85,000 for it and let’s say it has a coupon of 1% and matures December 31, 2025 - so I will have it for exactly 3 years
Presuming the $1,000 for 2023 interest will be taxed as income on my 2023 federal return
How is the $15,000 discount treated?
Is there any difference in treatment if the bond is a treasury strip with 0% coupons?
Thanks for any thoughts. Turbo Tax has pulled over a ton of info on my bonds and created various worksheets and I am getting “lost in the sauce”.
How is the discount on a treasury treated for income tax purposes. Example:
Bought $100,000 treasury on Jan 1, 2023. Paid $85,000 for it and let’s say it has a coupon of 1% and matures December 31, 2025 - so I will have it for exactly 3 years
Presuming the $1,000 for 2023 interest will be taxed as income on my 2023 federal return
How is the $15,000 discount treated?
Is there any difference in treatment if the bond is a treasury strip with 0% coupons?
Thanks for any thoughts. Turbo Tax has pulled over a ton of info on my bonds and created various worksheets and I am getting “lost in the sauce”.
