For tax purposes, there is no original issue discount on a bond unless the bond is issued for less than its face value and the difference between the face value and the bond issue price is at least one-fourth of 1 percent of the redemption price at maturity multiplied by the number of years to maturity.

Question

Quizplus · Accepted Answer

The statement accurately describes the conditions for an original issue discount on a bond to be considered for tax purposes.

For Tax Purposes, There Is No Original Issue Discount on a Bond