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ZCTBC

The user inputs the following data.

  • Purchase Status. Bond owner's status as an original holder (bought at the original issue) or a subsequent holder (bought in the after market).
  • Bond Dates. They are the dates for original issue, maturity date, and the owner's disposal of the bond. Subsequent holders also input their acquisition date.

  1. the calendar day on which the owner's tax year starts,
  2. the owner's marginal tax rates for: ordinary income other than dividends, ordinary dividend income, short-term capital gains, and long-term capital gains, and
  3. the minimum holding period to qualify for long-term capital-gain treatment.

Note that a US taxpayer's tax year can start on the first of any month and that most tax payers have calendar tax years.

  • Bond Owner's Tax Status. It is:

  1. the calendar day on which the owner's tax year starts,
  2. the owner's marginal tax rate for: ordinary income, short-term capital gains, and long-term capital gains, and
  3. the minimum holding period to qualify for long-term capital-gain treatment.

Note that a US taxpayer's tax year can start on the first of any month and that most tax payers have calendar tax years. The program will (at a later date) provide the user with the highest marginal tax rates for each date from 1913 to present.

The program then computes the following amounts with respect to the bond for each tax year from acquisition to disposal:

  1. ordinary (original issue discount) income,
  2. amortizable bond premium or discount, and
  3. short-term or long-term capital gains.

It also computes for each tax year the amount of tax owed in each category of income or expense and the total (net) tax.