If you have your original trade confirmation, you get five gold stars! If not, you can still compute the amortization tables you need to account properly for gain or loss on a bond or note, but with more effort.
The tools below will help you calculate yield and amortization tables.
Use the lowest Yield to Call, call date,
and call price whenever you buy a
callable tax-exempt bond at a
premium over par value. This is
called "Yield to Worst."
"Good and evil both increase at compound interest. That is why the little decisions you and I make every day are of such infinite importance." -- C.S. Lewis
Once you have your yield to maturity or yield to call factors, you can produce the amortization tables that you need to determine your cost basis at any point during the life of the bond or note.
This tool generates a table for either discount accretions or premium amortizations.
Click on the image below to access the amortization table generator.
Amortization Table Generator
A special problem is presented when a tax-exempt bond has multiple call dates and call prices. How do you amortize such a bond? The proper method is to amortize in phases, always choosing the worst yield each time. If it is not called at the first worst call date, treat it as a new purchase at the call price and amortize it to the next worst yield's call date and price. A detailed example of a bond premium amortization table for a callable tax-exempt can be found in the Excel worksheet to the right.
Use this worksheet only for tax-exempt municipal bonds. Taxable bonds are amortized (if so elected) using "yield to best" instead of "yield to worst."
Information provided is intended solely for cash-basis U.S. citizen individual taxpayers and is believed to be accurate for most cases but is not guaranteed. Always consult your personal tax advisor about your own situation. Suggestions are most welcome. Please email our webmaster @ costbasis.com with your comments. If this website has been helpful to you, please consider making a donation to support our efforts.