Is a corporate bond considered taxable income?

A corporate bond is indeed considered taxable income. When an investor receives interest payments from a corporate bond, those payments are categorized as ordinary income and therefore taxable at the investor's regular income tax rate. This is a key characteristic of corporate bonds, distinguishing them from certain other types of bonds, like municipal bonds, which often provide tax-exempt interest.

When it comes to capital gains realized from the sale of a corporate bond, if sold for more than its purchase price, that gain would also be taxable. The prevailing tax treatment provides a consistent approach to handling investments in corporate bonds, underlining the principle that income received from investments is subject to taxation.

Other options suggest conditions under which income might be taxable or not, such as limitations based on income levels or holding periods. However, corporate bond interest is not subject to these stipulations; it is taxed regardless of the investor's income level or how long they held the bond.