Assume a cash basis taxpayer purchased a three-year certificate of deposit on January 1 of...
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Accounting
Assume a cash basis taxpayer purchased a three-year certificate of deposit on January 1 of the current year. Under the original issue discount (OID) rules which of the following is true?
a.All of the income must be recognized in the year of maturity.
b.The interest income will be recognized equally over three years.
c.The OID will be included in gross income for the year of purchase.
d.The interest income will be recognized over three years but will be greater in the third year than in the first year.
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