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Thank you all for your kind replies. I found them very informative.

In my experience with preferred stocks, most are issued at $25/share. Depending on market conditions, the interest rate environment, corporate financial condition, etc., they can trade at a premium or discount to the issue price. If you buy a bond on the open market at a discount to its $1000 par value issue price (for say $900), the bond will ultimately mature at $1000 or could be called for $1000. That $100 "appreciation" is treated as interest not capital gain in bond tax accounting. My question would be do those bond tax rules (i.e. accrued market discount or amortization of bond premium etc.) apply to other income instruments like a preferred stock.
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