Quote:
Originally Posted by daniel200
My approach has to build a bond ladder by purchasing Treasury bonds that mature in 12 months or more and have a 0 to 1% coupon interest rate. That way my interest income is very low and the rest of the bond income is taxed as capital gains. (this minimizes my federal income taxes) I have been buying bonds for more than 1 year now and have some maturing every 2 or 3 months.
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Not sure I understand your post. Typically, if you buy a new Treasury bond and hold it until maturity, you will pay income tax on the interest earned annually, regardless of the term of the bond. There are no capital gains. The only way to earn capital gains on a Treasury bond is to buy it at a discount and sell it for a higher price than you paid for it. Are you buying over-the-counter bonds at a discount?