Access Leading Tax Experts And Technology
In Our Global Digital Marketplace

Please Type Topic Into Search Bar

Muni bond purchased at discount. Qualifies as "de minimus".

If a muni is purchased on the secondary market 10-01-2004 at 74340 (par =75000) due 12-15-2014. That is 660 market discount.

Normally the 660 would be reported as interest income. But, this qualifies as “de minimus” (660 is less than < 1875)
{one-fourth of one percent of redemption price multiplied by the number of full years after acquisition until maturity = .0025x75000x10}.

My confusion!
Since it qualifies as “de minimus”, market discount can be treated as ZERO. Does this mean there is no interest income to be reported and NO long term capital gain or does this mean no interest income and 660 long term capital gain?

Muni bond taxable gain.

Meet Leading Tax Advisors

User Photo John Stancil



User Photo Peter J. Scalise

Federal Tax Credits & Incentives Practice Leader

New York, NY

User Photo John Dundon, II EA

Tax Director

Denver, CO

User Photo John Richardson


Toronto, Canada

User Photo William Rogers, CFP, MBA, EA

CEO/Certified Financial Advisor

Rancho Santa Fe, CA

User Photo Monika Miles


San Jose, CA

User Photo Blake Christian

Tax Partner

Long Beach/ Park City, CA


View/Select our Current List of Tax Topics

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Previous PageNext Page



Learn from tax advisors, straight to your inbox

Update My Email Address
Contact Us Today