Milton Owns a Bond (Face Value of $25,000) for Which

question 123

Multiple Choice

Milton owns a bond (face value of $25,000) for which he paid $28,000. Which of the following statements is correct?

• A) If the bond is taxable, Milton must amortize the $3,000 premium over its remaining life.
• B) The adjusted basis of the taxable bond remains at $28,000, as the amortized amount is deducted as interest.
• C) If the bond is tax-exempt, Milton can elect to amortize the $3,000 premium over the remaining life of the bond.
• D) The adjusted basis of the tax-exempt bond remains at $28,000, as the amortized amount cannot be deducted as interest.
• E) None of the above is correct.

---

Definitions:

Inequality

The uneven allocation of resources, opportunities, and rights across different members of a society.

Equal Chance

Equal chance describes the principle of providing all individuals or groups with the same opportunity to achieve a certain outcome without bias or discrimination.

Conflict Theorist

A sociologist or scholar who views social life as a competition and focuses on the distribution of resources, power, and inequality.

Functionalist Perspective

A sociological approach that views society as a complex system whose parts work together to promote solidarity and stability, focusing on the functions that different elements perform.