FAQs: Corporate Bond

1. If the bond matured and was redeemed during the reporting period, should I still report the bond?

In that event, the bond is reportable if it produced more than $200 in income (usually interest income) during the reporting period. If the bond has already matured, the value will be “None (or less than $1,001).” (Note that, if you sold the bond before its maturity date, you may have both interest and capital gains to report.)

2. I’m not sure how to calculate the income from a corporate bond. Do you have a suggestion?

Filers are required to make a good faith effort to calculate the amount of interest produced. You may find the information you need in an IRS Form 1099 or in a brokerage account statement. Otherwise, you may be able to estimate the amount of interest during a reporting period by apportioning the difference between purchase price and maturity value over the bond’s term. (It is not sufficient to state a bond’s series or interest rate, because the law requires that amount be reported explicitly.)

 

This guide is not intended to provide investment advice, and you should not rely on statements in this guide when making investment decisions.

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