![]() 970,904,916 visitors served. |
|
![]() Dictionary/ thesaurus | ![]() Medical dictionary | ![]() Legal dictionary | ![]() Financial dictionary | ![]() Acronyms | ![]() Idioms | ![]() Encyclopedia | ![]() Wikipedia encyclopedia | ? |
accrued market discount |
0.01 sec. |
|
Accrued Market Discount The gain in the value of a discount bond expected from holding it for any duration until its maturity. Notes: As discount bonds are sold below face value, it is expected that they will gradually rise in market price until reaching maturity.
For example, let's say someone purchases a discount bond with a par value of $1000 for $700. By holding the bond, they can expect a maximum gain of $300. Any appreciation above the $700 paid is called the accrued market discount. This rise in price is different than that which occurs in regular coupon bonds as a result of lowering interest rates. Accrued market discount The rise in the market value of a discount bond as it approaches maturity (when it is redeemable at par) and not because of falling market interest rates.
|
|
? Mentioned in | ? References in periodicals archive | |
|---|---|---|
| A
discount on a secondary market acquisition (a market discount), on the
other hand, would, at the taxpayer's option, either be (1) treated
as ordinary income to the extent of accrued market discount at the time
the taxpayer redeems or otherwise disposes of the instrument; or (2)
accrued as interest income ratably over the period he or she holds the
bond. (Since the bonds were
purchased after April 30, 1993, the gain is taxed as ordinary income to
the extent of accrued market discount. |
| Free Tools: |
For surfers:
Browser extension |
Word of the Day |
Help
For webmasters: Free content NEW! | Linking | Lookup box | Double-click lookup | Partner with us |
|
|---|