12.3 Original Issue Discount (OID) and Market Discount Bonds
In this section
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Taxation of OID Bonds: Understanding Original Issue Discount Bonds and Their Tax Implications
Explore the taxation of Original Issue Discount (OID) bonds, including the calculation of OID for zero-coupon bonds, and how the discount must be amortized over the bond's life as interest income.
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Market Discount Rules: Understanding Tax Implications on Bonds
Explore the intricacies of Market Discount Rules, focusing on the taxation of bonds purchased below their adjusted issue price. Learn how market discount is treated as ordinary income and discover practical examples and calculations.
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