coupon payment is capital gain? afternoon, receiving, investor, capital, payment

metoyoushe

schweser vol 1 exam 3 afternoon # 99

an investor buys a par bond that pays an annual coupon of $80. He sells the par bond at par 1 year later.

a. capital gain of $80
b. no capital gain or loss


schweser says no capital gain or loss. I'm confused.

Here's the exact wording: ... if the investor sells the bond today (immediately after receiving the second coupon payment, and with no transaction costs), he will have:

invic

Home- since it was in the last year, any income he received would not qualify as cap gain

Interest from bonds is not cap gain, they go through income statement.

bluejazzy

capital gains are appreciation in the security i believe. dividends/coupons are taxed at personal income level...i may be wrong but thats my understanding