DavidD66
Expert Alumni

Get your taxes done using TurboTax

The premium is an amount above par that you pay for an investment.  For example, if you buy a $10,000 bond for $10,500, you are paying a premium.  The higher price you pay results in a lower than stated interest rate of the investment.  If it is "covered" it is reported to the IRS.  If it is non-covered, it is not reported to the IRS.   

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