Go Back  DVD Talk Forum > General Discussions > Other Talk
Reload this Page >

Question about a Certificate of Accrual on Treasury Securities (CATS)

Other Talk "Otterville" plus Religion/Politics

Question about a Certificate of Accrual on Treasury Securities (CATS)

Old 02-07-06, 12:44 PM
  #1  
DVD Talk Legend
Thread Starter
 
Join Date: Mar 2003
Location: Lyon Estates
Posts: 10,795
Question about a Certificate of Accrual on Treasury Securities (CATS)

Hi. There was a bond that was never used for me in college and my parents had forgotten about it so I ended up getting this bond statement over the summer that it had matured and I could use it (even though I'm out of school). Anyway, I was told that I had paid tax on it each year as it matured and that I wouldn't have to pay federal tax on this once it was cashed, since it would be paid up.

Anyway, I got a 1099-B form that I entered into turbo tax and for some reason my return drops about $1000 when I enter it in. Is this right? I thought that since the tax was paid that it wouldn't be considered unearned income and therefore be pretty simple. Maybe it's Turbotax's weirdness or something. Anyone have any ideas? Thanks

Last edited by dick_grayson; 02-07-06 at 12:48 PM.
dick_grayson is offline  
Old 02-07-06, 02:13 PM
  #2  
DVD Talk God
 
kvrdave's Avatar
 
Join Date: Aug 1999
Location: Pacific NW
Posts: 86,200
You may have paid tax on it, but did it push you into a higher bracket for your other income?
kvrdave is offline  
Old 02-07-06, 02:25 PM
  #3  
DVD Talk Legend
Thread Starter
 
Join Date: Mar 2003
Location: Lyon Estates
Posts: 10,795
no, it's same bracket. I called the US Bank (who issued the bond) and got some asshole who thought he was clever and kept saying that he wasn't a tax accountant, even though I simply asked him to look up when the bond was issued (info. he had) after explaining my situation. I wish I could have gotten his name to make a complaint or see if he worked in the area, so I could "surprise" him at work.

Anyway, is there even such a thing as a bond where one pays the tax before cashing it in and then has to pay no tax? I assume, unfortunately, that since it's a 1099-B and only lists the sale date, amount and description (certificate of accrual on treasury) that I'll end up having to pay [more] tax. Shit......
dick_grayson is offline  
Old 02-07-06, 02:29 PM
  #4  
DVD Talk Hero
 
Join Date: Jul 2001
Location: MI
Posts: 25,041
I'm not very knowledgable about bonds, and tax effects.

Generally, if you get a 1099-B, you have to dig out your records and find out what it cost when you acquired it. Then Schedule D taxes you capital gains taxes on the difference. If you don't enter that cost, the 1099-B rolls in the amount for selling price, Schedule D assumes $0 for purchase price and the whole amount is taxed.

Now on bonds, some pay the interest every year, and some pay only at maturity. Some treasury bonds pay at maturity, but you are allowed to treat the interest as having been paid annually, and pay the taxes year by year instead of all the end. I don't really know how that is handled as I only buy stocks.

But I know you need the purchase price of the bond to avoid paying tax on too much. You may also need past tax records as proof taxes were paid annually on the imputed interest.
OldDude is offline  
Old 02-07-06, 03:39 PM
  #5  
DVD Talk Legend
Thread Starter
 
Join Date: Mar 2003
Location: Lyon Estates
Posts: 10,795
Thanks for the info. That's what I was afriad of. I guess I'll have to go back and find my taxes from 1991 and so on to see how much I paid for this bond. Of course, I was 12 in 1991, so my income would have been much less, if anything. I suppose that could be the reason why I'm paying more now. I do remember always owing money though in high school and college when I should have been getting a substantial return back and always assumed it was because of the tax I had been paying on this bond.
dick_grayson is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Thread Tools
Search this Thread

Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.