Series 7 - General Securities Representative Exam

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According to the IRS, If a bond is bought at 105, what is the tax basis if is held until maturity?

The original purchase price
A
The original purchase price as long as the premium was not amortized over the life of the bond
B
Par value minus the discount as long as the premium was not amortized over the life of the bond
C
Par value minus the premium as long as the premium was not amortized over the life of the bond
D

Explanations

The bond was bought at a premium. The original purchase price listed on your trade confirmation, assuming you did not choose to amortize the premium over the lifetime of the bond is the tax basis

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