Question

Which is true about the interest on corporate bonds?

a. it is taxed a capital gain
b. it is tax deductible
c. it does not incur taxes
d. it is taxed as ordinary income

Answer 1

The correct answer is letter B. It is tax deductible. The true about the interest on corporate bonds is that it is subject to federal and state income tax. These interests are deducted by taxes that are directly brought to federal and state income at a certain rate.