Quote:
Originally Posted by retiredguy123
You can buy low interest rate bonds at a discount. For example, buy a bond that is paying 1 percent or less, and will mature in about 5 years. You will get a price that is significantly lower than the face value of the bond. Then, when the bond matures, you collect the face value and you will owe a capital gains tax that will probably be lower than your ordinary tax rate. You will need to pay interest annually on the 1 percent, but you will delay most of the taxes that you will eventually owe.
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This is an excellent method to delay taxes on US treasury bonds. Not only are you delaying the taxes, but the there is a tax savings due to the capital gains rate. And under current rules you pay zero tax on your first $41,675 in longterm capital gains if filing as single or $83,350 in long term gains if married filing jointly
This results in more total money in your pocket.