Sentences with phrase «issue discount bond»

Zeros are issued at a discount and mature at par value, and the amount of the spread is divided equally among the number of years to maturity and taxed as interest, just as any other original issue discount bond.

If the bond has face value $ 1100 five years from now and is sold by the issuer for $ 1000 today, then it is not a coupon bond in the usual sense of the word (and it does not have a 10 % coupon) but rather it is a zero - coupon or original issue discount bond.

Not exact matches

In these cases, the difference between the bond's issue price (the discounted rate) and its face value would be considered tax - exempt income rather than capital gains.

Buying a bond at market discount is different than buying a bond at Original Issue Discoundiscount is different than buying a bond at Original Issue DiscountDiscount (OID).

These securities are known as Original Issue Discount (OID) bonds, since the difference between the discounted price at issuance and the face value at maturity represents the total interest paid in one lump sum.

So while these «fallen angel» bonds have the potential to be intrinsically higher quality than debt originally issued at the junk or high - yield level, undue structural selling pressure from the downgrade can cause them to sell at a discount.

Zero - coupon Zero - coupon corporate bonds are issued at a discount from face value (par), with the full value, including imputed interest, paid at maturity.

the difference between the stated redemption price at maturity (if greater than one year) and the issue price of a fixed income security attributable to the selected tax year; NOTE: Tax reporting of OID obligations is complex; if acquisition or bond premium is paid during the purchase, or if the obligation is a stripped bond or stripped coupon, the investor must compute the proper amount of OID; refer to IRS Publication 1212, List of Original Issue Discount Instruments, to calculate the correcissue price of a fixed income security attributable to the selected tax year; NOTE: Tax reporting of OID obligations is complex; if acquisition or bond premium is paid during the purchase, or if the obligation is a stripped bond or stripped coupon, the investor must compute the proper amount of OID; refer to IRS Publication 1212, List of Original Issue Discount Instruments, to calculate the correcIssue Discount Instruments, to calculate the correct OID

The move could potentially allow Neiman Marcus to issue new debt to buy back its bonds at a discount, helping slash its debt pile.

Investors» warm reception for this week's $ 3.5 bln issue looks strange given the island's junk rating and rocky finances, not to mention that existing bonds trade at a big discount.

One thing to note is that there may be a long term capital gains tax on the profits you make from your zero coupon municipal bond depending on what price you bought it compared the the original issue discount price.

You may also come across zero - coupon bonds which pay no interest but which are issued at a discount to the value on maturity, creating a capital gain.

For example, if a $ 5,000 tax - exempt bond (issued at par on January 1, 2003) with a 20 - year maturity were purchased five years after its issuance (on January 1, 2008) at a price of $ 4,400, the market discount would be $ 600.

Flower bonds: U.S. government securities that were issued at a discount from par value, but are acceptable at par in payment of estate taxes.

Zero coupon bonds are issued at a discount to par value.

If a tax - exempt bond is originally issued at a price less than par (as distinguished from a subsequent sale of a previously - issued bond), the difference between the issue price of such bond and the amount payable at the maturity of the bond is considered «original issue discount» (OID).

In addition, Internal Revenue Service Publications 550, «Investment Income and Expenses,» and 1212, «List of Original Issue Discount Instruments,» may provide useful information for investors who buy, hold or sell market discounDiscount Instruments,» may provide useful information for investors who buy, hold or sell market discountdiscount bonds.

In order to determine the constant yield to maturity on a bond, it is necessary to determine a constant discount rate that must be applied to each and every payment on the bond (principal and interest) in order to produce an aggregate value (as of the issue date) that is equal to the issue price of the bond.

Market discount exists when a bond falls in value after it has been issued.

How would market discount be calculated in the case of a tax - exempt bond that was originally issued at a discount?

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Amortizable bond premium can also result if a holder purchases a bond that was originally issued at a discount and the purchase price exceeds the issue price of the bond plus any accrued OID on the bond.

the bond is issued at a discount and is later purchased in the secondary market at a price that is less than the original issue price plus accrued original issue discount through the date of purchase.

Series EE savings bonds are different in that they are issued at a deep discount from face value and pay no annual interest because it accumulates within the bond itself, and the interest is paid out when the bond matures.

The Treasury notes have maturity dates of 10 years or less, and like Treasury bonds, can be issued at a discount, at a premium, or at par.

Depending on the length of time until maturity, zero - coupon bonds can be issued at very large discounts to par, sometimes 20 % or more.

A discount bond is a bond that is issued for less than its par (or face) value, or a bond currently trading for less than its par value in the secondary market.

When bonds make their debut at issue or when they enter the secondary market they can be purchased through full - service, online or discount brokers, and investment and commercial banks.

Some short - term bonds, such as the U.S. Treasury bill, are always issued at a discount, and pay par amount at maturity rather than paying coupons.

No attempt was made to address Original Issue Discount (OID) bonds which also have tax advantages regarding price appreciation.

An original issue discount (OID) is the discount from par value at the time a bond or other debt instrument is issued; it is the difference between the stated redemption price at maturity and the actual issue price.

No - coupon agency bond notes or «discos»: no - coupon discount notes are issued by agencies to meet short - term financing needs and are issued at a discount to par value.

He was able to offer a wrap account for a percentage of my holdings and he said that they could offer some products (bonds, new issues, flow thoughs) for the same cost as the online broker but, overall his advice was that I still needed the online discount broker account.

The Original Issue Discount (OID) form is used to show the bond interest on a bond when issued at a price lower than its maturity value.

IRS regulations require cost basis adjustments for bonds bought at a premium or discount, as well as original issue discount (OID) debt.

This type of bond (also called an «accrual bond») doesn't make coupon payments but is issued at a steep discount.

Instead, governments, government agencies and companies issue bonds with zero - coupon rates at a discount to their par value.

A similar type of bond, known as an «original - issue discount» bond, is issued below par value and may pay out some interest.

The federal tax treatment of zero - coupon and original - issue - discount bonds is quite complicated, so if you plan to invest in them, first consult your tax advisor.

The AFR is useful for tax concepts such as Original Issue Discount (when issuers sell low - interest or no - interest bonds or loans at less than face value, attempting to recharacterize interest income as return of principal), various grantor trusts (e.g. GRATs), and so forth.

You're required to report a portion of that OID (original issue discount) each year you own the bond.

Zero Coupon Municipal Bond OID Accretion Calculator: Calculate the annual Original Issue Discount accretion for up to 25 zero coupon municipal bonds at once.