Quote:
Originally Posted by Caymus
Are you sure that is correct?
|
Absolutely correct. If you purchase a bond with a maturity greater than 1 year, the gains are taxed as long term capital gains at bond maturity. Any interest is taxed as ordinary income. So buying a zero coupon bond effectively transfers interest to capital gains. Call any tax planner if you want to verify.
This is the updated 2023 long term capital gains brackets from the IRS: