But investors may use the ratable method with respect to any other market discount bonds
, unless they choose separately for each bond to apply the constant yield method.
Compared with other bonds, investors buying the discount bonds
in the same par value will pay less.
We understand anecdotally that it is common market practice for taxpayers to report market discount upon payments on or the proceeds of the disposition of market discount bonds
which have been purchased for more than 50 cents on the dollar, and for taxpayers to allocate payments on or the proceeds of a disposition of market discount bonds
which have been purchased for less than 50 cents on the dollar to a return of basis before recognition of market discount or other gain on the bonds, regardless of whether the bonds in question are in default.
investors, by comparison, received a discount bond
reflecting a 66.
Unlike certificates of deposit, where deferred income is currently taxed, market discount bonds
allow income recognition to be deferred until maturity or disposition.
A taxpayer determines the amount of original issue discount allocable to an accrual period using steps similar to those for original issue discount bonds
that are not inflation-indexed (see Q 7737).
As a result, there is substantial uncertainty on the treatment of market discount bonds
upon the occurrence of a default.
5) In developing the procedures for the Argentine bond exchanges, the parties were able to build upon the structure of the par bonds and discount bonds
created under the Mexican Brady-bond transaction.
67bn after buying back at a discount bonds
with a face value of EUR3.
The law also provides for certain limits on the deductibility of interest expense incurred to purchase or carry market discount bonds
Exhibit 1 summarizes the differences in the taxation of returns on premium bonds, market discount bonds
, and OID bonds for both taxable and tax-exempt municipal bonds.
31, 2003, for those who opt for par and discount bonds
Rather than wait for future tobacco-related revenues to materialize, a number of governments have sought immediate access to at least some of these resources by persuading investors to purchase at a discount bonds
secured by anticipated future collections.
Treasury Bonds, Treasury Inflation Protected Securities (TIPS), and market discount bonds
As in previous years, various means of tax evasion were reported in the survey, which includes illegal accounting, misuse of overseas transactions and changing assets into discount bonds
or gold bullion and concealing them in homes or car trunks.