With interest rates close to peak levels, bondholders do not have to be told that most of their bonds are selling below purchase price. But cheer up, with five weeks remaining in 1979, these losses may be used in tax swapping to your advantage. Tax swapping may be carried out in any type of fixed-income security but it is carried out mostly in tax-exempts.

To have a long-term capital loss, you must own a bond a year or longer. If you own the bond less than a year, you have s short-term loss. A long-term capital loss may be used to offset or shelter any already realized long-term capital gains on a dollar-for-dollar basis. Also up to $3,000 of long-term losses can be used to offset $1,500 of ordinary income.

Another good feature in taking bond losses is that proceeds may be reinvested the same day in another bond so that you will lose no income while making the transaction. In such trades, investors should stay with quality and try to improve the overall character of the portfolio, especially because we may be going into a recession.

Odd lots may be sold and consolidated into larger holdings. More in-state bonds may be purchased to increase local tax exemption. Better geographical diversification as well as sources of revenue may be obtained. Higher current income and better marketability should be sought. And remember, if the new bond is purchased at a discount, you are setting yourself up for a potential capital gain.

In doing tax swaps, the Tax Code states that at least two of three key features must be changed in the new security: the coupon, the maturity and the issuer. To be on the safe side, I suggest always changing the issuer. If you are in love with the bond you are selling, you may repurchase said bond after 30 days. If you do not wait 30 days, the transaction could be disallowed as a "wash sale" by the IRS.

A competent, reliable broker can assist you and turn your tax-loss exercise into a highly beneficial event. Remember, only five weeks to go.

Beginning Jan. 2, the old Series E Savings Bond that we have known for years will be replaced by the Series EE Savings Bonds. These new bonds will be offered in various denominations from $50 up to $10,000 and will mature in 11 years. The purchase price will be half the face value of the bond. For example, a $100 bond will cost $50. At maturity in 11 years, the investor will receive $100 for his bond. This works out to a guaranteed rate of return of 6.5 percent. You receive no interest payments until the bond matures or is redeemed.

In actuality the yield at the end of the first six months is 4 percent, and it increases during the next four years to provide an overall return of 6.5 percent for the first five years. For the remaining six years, the interest rate will be 6.5 percent a year.

These bonds are guaranteed by the U.S. government, by be registered and are easy to purchase. After the first six months, if they have a redemption value of $500 or more, they may be exchanged into the new Series HH bonds where current income is available through an interest check every six months.

Taxes may be deferred on the Series EE until maturity. Or if they are exchanged for the Series HH bonds, the federal income taxes may continue to be deferred until the HHs are cashed, disposed of or reach final maturity, whichever occurs first.