Hypothetical situation here. I buy a TIPS in my taxable brokeratge account and hold it to maturity. Inflation ensues for a year or two, and the principal on the bond increases. I pay income tax every year on those annual increases. Then deflation ensues for a few years (rare, I know). The principal value decreases. At the time of maturity, the deflation-adjusted principal would be less than the purchase price, so I get my purchase price back. What about the income tax I paid along the way, on the earlier principal increases (that I never actually received and thus couldn't spend)? Do I get those taxes back? (Now *there's* a silly question.)
Statistics: Posted by syc — Wed Mar 06, 2024 10:18 pm — Replies 2 — Views 292