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<<I bought $50000 of muncipal bonds nine years ago for a price of 104 per bond. They were called-in in November at par or 100... can I still deduct a $4.00 loss per bond on the sale of these bonds?>>

Nope. You have to amortize the bond premium amount down to the price at call (par, in this case). Internal Revenue Code Section 171 has the rules on this, DNK what IRS publication talks about this.
Technically you should be amortizing every year, and deducting that amount (on your tax return) from the tax-exempt interest you're receiving on the bond. You also reduce your tax cost on the bond by the amount you amortize. However, that shouldn't effect your actual tax liability on your prior returns (save in some unusual situation).

Since the bond was called at par, your tax cost is at par, no gain or loss.

Hope that helps,

-synchronicity
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