Milton owns a bond (face value of $25,000) for which he paid $28,000.Which of the following statements is correct?
A)If the bond is taxable, Milton must amortize the $3,000 premium over its remaining life.
B)The adjusted basis of the taxable bond remains at $28,000 because the amortized amount is deducted as interest.
C)If the bond is tax-exempt, Milton can elect to amortize the $3,000 premium over the remaining life of the bond.
D)The adjusted basis of the tax-exempt bond remains at $28,000 because the amortized amount cannot be deducted as interest.
E)None of these is correct.

Question

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The Answer of Milton owns a bond (face value of $25,000) for which he paid $28,000.Which of the following statements is correct?
A)If the bond is taxable, Milton must amortize the $3,000 premium over its remaining life.
B)The adjusted basis of the taxable bond remains at $28,000 because the amortized amount is deducted as interest.
C)If the bond is tax-exempt, Milton can elect to amortize the $3,000 premium over the remaining life of the bond.
D)The adjusted basis of the tax-exempt bond remains at $28,000 because the amortized amount cannot be deducted as interest.
E)None of these is correct.

Milton Owns a Bond (Face Value of $25,000) for Which