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Discount Bond

   Also found in: Wikipedia 0.01 sec.
Discount bond
Debt sold for less than its principal value. If a discount bond pays no coupon, it is called a zero coupon bond.

Discount Bond
A bond or other debt instrument that is issued at a price below its face value. For example, a bond with par of $10,000 might be issued to an investor for $7000. All zero-coupon bonds are discount bonds.

discount bond
A bond selling at a price that is less than its par value. In addition to semiannual interest payments, a discount bond offers investors additional appreciation if the security is held until maturity.


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The income from newly issued TIPS may be accounted for under either the coupon bond method or the discount bond method.
As in previous years, various means of tax evasion were reported in the survey, which includes illegal accounting, misuse of overseas transactions and changing assets into discount bonds or gold bullion and concealing them in homes or car trunks.
However, the gain on the sale or redemption of market discount bonds acquired after April 30, 1993 is taxed as ordinary income to the extent of the accrued market discount.
 
 
 
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