Originally Posted by
Snoopy
The question might be pointless if you held a bond from issue to maturity - yes. But the question might be important if you did not buy a bond at issue and subsequently sold it, or held it to maturity. As bonds are regarded as a 'scheme of arrangement' by the IRD, and net proceeds, including capital gains, are taxable, the total interest earned previously may decrease your capital gain tax liability once you exit the bond. Capital gain in a scheme of arrangement includes any associated interest payments.
The capital tax liability of bonds does not depend on whether you are an 'bond investor' or 'bond trader'.
SNOOPY