I have recently bought some municipal, tax-free , bonds...
The par value is 50K, but I had to pay 53K for them since the interest rate they pay is higher than the "going rate".
How do I treat the extra 3K ?
For instance, can I deduct it from the interest that the bonds pay in the year I purchased them, or do I have to wait 25 years until the bond matures and I get back 50K for the bond I paid 53K for ?
Thanks.
AndyS