"OC" in the context of bonds typically refers to "Original Cost". This is the initial price paid for the bond when it was first purchased.
Here's how it's relevant:
- Tracking Investment Performance: Investors often track the original cost of their bonds to determine their overall return on investment.
- Calculating Capital Gains/Losses: When a bond is sold, the difference between the original cost and the selling price determines whether a capital gain or loss has occurred.
- Tax Reporting: Original cost is crucial for reporting bond transactions on tax returns, as it helps calculate the taxable gains or losses.
For example, if you purchased a bond for $1,000 and later sold it for $1,100, your original cost is $1,000, and you've made a capital gain of $100.
