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July 16, 2024
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My investment sales are on Schedule D with a market discount which increases the basis as expected. Why is the amount of the market discount showing up on Schedule B?

  • July 16, 2024
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Best answer by rjs

The accrued market discount is, in effect, additional interest that you earned on the bond. But you did not report it as interest income each year that you owned the bond, so you have to report it as interest income when you sell the bond.

 

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rjs
rjsAnswer
Employee
July 16, 2024

The accrued market discount is, in effect, additional interest that you earned on the bond. But you did not report it as interest income each year that you owned the bond, so you have to report it as interest income when you sell the bond.