When us treasuries are bought on the open market at a discount is the profit treated as a capital gain rather than interest??

[KochuK]

Hi james7878, thanks for posting an event question.

The discount profit from purchasing US Treasuries in a secondary market is treated as interest income as bond prices fluctuate contrarily with interest rates.

However the timing of reporting interest income varies. Please refer to IRS Pub 550 Investment Income and Expenses, pages 14-15, under "Market Discount Bonds" for more information.

https://www.irs.gov/pub/irs-pdf/p550.pdf 

Hope the above helps. Thank you.