My accountant says that if you purchase a bond with accrued interest you deduct the accrued interest from interest on Schedule B if the interest is paid in the same year as the purchase. If the interest is paid in the following year it is ignored. In neither case does it affect the cost basis.
Is that correct?
I would think that you would have to add accrued interest to Schedule B when
you sell a bond if the interest would be paid in the sale year, but that is
just a guess. Is it a correct guess?
If you can refer me to a good explanation of all this, that would be great.
- posted 11 years ago
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