A bond held by an investor that is uncollectible will be treated as a worthless security and, hence, produce a capital loss.

Question

Quizplus · Accepted Answer

When a bond held by an investor becomes uncollectible, it is considered a worthless security and generates a capital loss for the investor. This loss can be used to offset other capital gains or to reduce taxable income up to a certain limit in a given tax year.

A Bond Held by an Investor That Is Uncollectible Will