In , Pliers wrote:


"Roger Morton" wrote in message

Was the stock purchased during that tax year?

Yes.
The stock was bought on 9/5/08. The gross distribution was made on
7/9/08 so
the previous distribution would have been on 7/3/08.


Right - the contract note (if you have it) for the purchase on 9/5/08
should therefore show the cost of about 68 days of accrued interest
(from 7/3/08 to whatever the settlement date for the purchase was), and
that figure should be consistent with the number you've been given in
the financial statements.


So it suggests the amount to declare is distribution minus accrued.


Yes - but beware, as David Woolley points out, that can imply you have
to hold over an accrued interest cost incurred in one tax year, if the
next interest payment date doesn't crop up until the next tax year.
Doesn't apply in your current case, though.

Very helpful, thanks. Much more so than the issuer of the tax
certificate
managed. Hopefully they will be more forthcoming to second time of
asking.


I really wouldn't hold my breath on that one - in my experience they
expect their clients to have perfect knowledge :-)

--
Roger Morton

In , Ronald Raygun
wrote:


However, the explanation meanwhile offered by Roger Morton seems
highly
plausible, i.e. that, following the usual periodic crediting of
interest,
the portion of the interest which had accrued before the stock was
purchased was deducted and remitted to the previous holder,

It doesn't work like that; the issuer of the stock always pays the
whole interest amount to whoever is recognised as the holder on the
record date. There's no concept of part-period payments being remitted
at the end of the period - they flow through the market at the time of
each trade, and the issuer remains blissfully unaaware of them.

--
Roger Morton

Accrued interest is the amount of interest currently due but not yet paid on a bond issue. The process of calculating the amount of interest accrued depends on identifying the number of days that have passed since the last disbursement of accrued interest to the owner of the bond. At the same time, it is important to know the rate of interest that is compounded at each schedule coupon date.