basis price

You are talking about a basis price that is tiny compared to the current valuation.

In plain English, what this means is that the Internal Revenue Service has no information on the basis prices of stocks, mutual funds, homes or anything else.

If you acquire the bond when it is issued at a discount to its face value and the bond is later called, any excess over your adjusted basis price will be the capital gain.

To the Editor: A Feb. 20 letter about American companies incorporating in Bermuda makes an important point in stating that the Internal Revenue Service, in the absence of an audit, has no information on the basis price of investments.