Do the returns on US Treasury bonds count as Capital gains?
not the interest
and there is no way to give you a specific answer on USTBs. some have OID or accrued market discount that increase your tax basis. Also, the selling price needs to be greater than their tax basis. The best source of info is your broker
generally
OID - a bond is issued at a price lower than its redemption value. The OID accrues as interest and since not paid adds to the ax basis. However, OID is computed based on the original issue. The issuer does not track the activity in the secondary market. for a bond purchased in the secondary market. The amount on the 1099-OID needs to be adjusted if the purchase price is different than the issue price + accrued OID
MARKET DISCOUNT is the amount by which the bond's stated redemption price at maturity exceeds the taxpayer's basis in the bond immediately after acquisition in the secondary market. A taxpayer can choose to accrue the market discount and include it in the current year's interest income. otherwise, its ordinary income when disposed of up to the amount of market discount.
MARKET DISCOUNT AND OID. if a market discount bond also has OID. the market discount is the sum of the bond's original issue price and the total OID includable in the gross income of all holders before the taxpayer acquired the bond, reduced by the taxpayer's basis in the bond immediately after acquisition.
