I sold a Zero Coupon Bond prior to maturity. Do I claim the OID that I never actually received as an Ordinary or Capital Loss?
For example: I bought a zero coupon bond for $25K and each of the past 3 years I have received a 1099-OID of $1K. I sold the bond prior to maturity for $20K. The Cost Basis is then $28K (Original purchase + $1K OID x 3).
This results in a net loss of $8K.
Do I claim the $3K as an Ordinary and $5K as a Capital Loss? Or is all of the loss considered Capital?
Thank You
