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Tax Alpha Insider

TIPS taxation: the other phantom menace

Taxation without realization

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Brent Sullivan and Elie Rozner
Sep 14, 2025
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👏👏 Special thanks to Elie Rozner for his superb research and writing 👏👏

TIPS coupons are taxed like regular Treasury coupons, but there’s a catch…

To begin, Treasury inflation-protected securities (TIPS) income is taxable as ordinary income and exempt from state tax.

Bond principal is adjusted per Consumer Price Index for All Urban Consumers (CPI-U). …

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Elie Rozner
Independent trader with a passion for tax efficient investing
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