flower bond

Flower bond

Government bonds that when owned at the time of death are acceptable at par in payment of federal estate taxes.

flower bond

Any of a limited series of U.S. government bonds that may be used at par to pay federal estate taxes. The bond is unique because there is no minimum time for which it must be held; further, its holder does not have to wait until maturity to use it at par for paying the tax. Flower bonds have not been issued since 1971.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

References in periodicals archive ?

Smith, 1987, "Death and Taxes: The Market for Flower Bonds," Journal of Finance 42, 685-698.

(18) Mayers and Smith (1987) document an instance of certain US government securities, known as flower bonds that trade at a substantial premium (i.e., lower yield) than comparable non-flower bonds.

Enhancing security value by ownership restrictions: evidence from a natural experiment

6 We dropped three bonds from the initial sample of 26 bonds because they are "flower bonds" with coupon rates below 5%.