Question

Which is true about the interest on corporate bonds?

It does not incur taxes.
It is taxed as a capital gain.
It is taxed as ordinary income.
It is tax deductible.

Answer 1

It is tax deductible

Step-by-step explanation:

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Answer 2

The correct answer is "It is tax deductible." Interests on corporate bonds are subject to federal tax and state income tax. These interests are deducted by taxes that are directly brought to federal and state income at a certain rate.