Jane, a cash basis individual, purchased a publicly traded bond at a $6,000 market discount. Which of the following statements is true?
A. If Jane holds the bond to maturity, she will recognize a $6,000 capital gain.
B. If Jane holds the bond to maturity, she will recognize $6,000 ordinary income.
C. Jane must accrue the market discount as interest income over the life of the bond.
D. None of the statements is true.
Answer: B
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