"Benjamin Yazersky CPA" <john...[at]nowhere.com> wrote:
- quote -

Why would the premium have to be amortized? Isn't
amortization simply an option I can elect that would allow
me to reduce my taxes each year until the bond matures? Why
can't I decline to amortize and thus pay more taxes each
year and then when the bond matures I add the premium to the
cost basis and take a capital loss? Where can I find the
regulation that requires me to amortize the premium?

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- quote -

Yes, the year the bond is sold or matures.

- quote -

The year you receive the first interest payment.

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<lxhop[at]yahoo.com> wrote:

- quote -

you need to amortize the premium to the 1st call date

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > > -----> real address on hobokeni or hobokenx <-----

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I bought taxable corporate bonds that each have a premium
and accrued interest. If I choose not to amortize the
premiums, would I include that amount in the cost basis and
report the sale as a capital loss on Schedule D? And since
accrued interest is to be deducted from total interest
income on Schedule B, would I do that in the year the bond
is bought or when it matures?

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >