Quote Originally Posted by Snoopy View Post
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
No matter when you bought it if you declare all the interest you receive each year as you receive it it's pointless to have to add it all on just to subtract it off again.
However when you buy a bond you often have to pay for accrued interest which is included in the price but just passed on to the seller. So when the first interest payment is made to you IRD says you got it but you didn't really get all or even any of it. Maybe some people adjust for this and so need some sort of resolution on selling.

"The capital tax liability of bonds does not depend on whether you are an 'bond investor' or 'bond trader'."
True. But what if its a capital loss? As it's written you include it as Other Income whether it's a gain or a loss. Seems unusual to me that a 'bond investor' could claim a loss whereas a 'share investor' can't.