Jane, a cash basis individual, purchased a publicly traded bond at a $6,000 market discount. Which of the following statements is true?
A) Jane must accrue the market discount as interest income over the life of the bond.
B) If Jane holds the bond to maturity, she will recognize a $6,000 capital gain.
C) If Jane holds the bond to maturity, she will recognize $6,000 ordinary income.
D) None of these statements are true.
Correct Answer:
Verified
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