Bond inquiries -- SIE

FINRA FINRA SIE
1

Hi all,
I need some clarification re: bonds so i’ll ask some of them below:

  • Can someone tell me when T-Receipts are issued? Are they issued monthly like T-Notes and T-Bonds or in weeks like T-Bills?

  • Can someone tell me the taxation on T-STRIPS, TIPS and T-Receipts? Are they always taxed on the federal level?

Thanks!
–Guy

2

Hi Guy,

Remember, a T-Receipt is basically a T-Note/Bond that is bought by a BD and repackaged into a zero coupon bond. As such, they aren’t issued at a specific frequency, rather, they’re continuously sold.

Taxation is on the federal level only. STRIPS and receipts are OID, so they must accrete every year despite not paying until maturity. TIPS are taxed each year on the interest paid, along with any adjustments caused by inflation.

It might be a good idea to review these chapters!

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3

I created a cheat sheet on all things Bonds, so I should’ve re-read the material. Thanks for the reminder!

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