Sandra, a cash basis taxpayer, purchased a certificate of deposit for $970 on July 1, 2013, that matures on June 30, 2014, with the maturity value being $1,000 Also on July 1, 2013, she purchased a certificate of deposit for $940 that matures on June 30, 2015, with the maturity value being $1,000 I...

The certificates are original issue discount instruments Sandra is ...

Sandra, a cash basis taxpayer, purchased a certificate of deposit for $970 on July 1, 2013, that

Question:

Sandra, a cash basis taxpayer, purchased a certificate of deposit for $970 on July 1, 2013, that matures on June 30, 2014, with the value being $1,000. Also on July 1, 2013, she purchased a certificate of deposit for $940 that matures on June 30, 2015, with the value being $1,000. Is Sandra required to recognize any income from the certificates in 2013, 2014, or 2015? Explain.
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...