zero coupon bonds tax implications

bonds may not reach maturity for decades, so it is important to make sure that any bonds purchased have been issued by creditworthy entities. . Some zero-coupon bonds are issued by corporations. If you are retired and looking to generate a current, steady stream of income, zero-coupon bonds are probably not high on your list of potential investments. Investors who need to sell their bonds before maturity can do so easily. Perhaps the version most familiar to many investors is the old.

Your Financial Advisor with Wells Fargo Advisors can help you determine whether these securities t your investment objectives and risk tolerance and which types may best suit your investment needs. The Resolution Funding Corporation also issues zeros. You must pay tax on interest annually even though you dont receive it until maturity. The power of compounding, the guaranteed rate of return.S.

Zero coupon bonds tax implications
zero coupon bonds tax implications

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Investors interested in growth might appreciate the fact that zeros can rise in value as interest rates fall. Treasury zero-coupon bonds?, years held 1, this information is hypothetical and is meant as an illustration only. Issues and Issuers, zero-coupon bonds come in many varieties. Treasury zero-coupon bonds, zeros with government backing to meet future needs. They offer investors the potential for growth. Treasury zero-coupon bonds do not pay periodic interest, investors still pay taxes every year as if they were receiving the accrued income payments. Treasury market offers investors various options for investing in zero-coupon bonds, which provide the credit safety of the.S. Back to Bond Information Center. Often, though, investors have a nancial need in the future, such as preparing brunswick zone north brunswick nj coupons for retirement, a childs education or a charitable contribution, but may not need regular income payments.