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Greta
Level 7
February 24, 2025
Solved

Original issue discount for the year...$2K

  • February 24, 2025
  • 1 reply
  • 18 views

Every other entry is zero. I assumed if it's a discount that it would be subtracted from some other income. But no? Is it actual interest income in 2024? The word "discount" threw me off, and I've missed it the prior two years.

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Best answer by BobKamman

Zero-coupon bond bought for 10,000 matures in 5 years for $20,000.  The "original issue discount" is $2,000 a year for 5 years.  Just for illustration, usually the amount changes every year, but you get the idea.  

1 reply

BobKamman
BobKammanAnswer
Level 15
February 24, 2025

Zero-coupon bond bought for 10,000 matures in 5 years for $20,000.  The "original issue discount" is $2,000 a year for 5 years.  Just for illustration, usually the amount changes every year, but you get the idea.  

    G
    GretaAuthor
    Level 7
    February 24, 2025

    So it's taxable each year, and I've been missing it.

      F
      Frustrated-in-IL
      Level 8
      February 25, 2025

      So, apparently, has the IRS.

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