What do I classify a matured CD (Certificate of Deposit) as under the drop down menu for "What type of investment did you sell?" Stock, Bond, or Mutual Fund?

Forum|Forum|5 years ago
June 30, 2020
2 replies
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These are the only options that would be remotely close under TurboTax's drop-down menu of options. These CD Dividends are showing up under a 1099-B.

TurboTax Premier Online

Carl11_2

Employee

You don't report the cash out of a CD in the Investments section. It gets reported under the Personal Income tab in the Interest and Dividends section. Since CD's earn/pay interest, you will report it as 1099-INT interest income. An actual 1099-INT form is not required for you to enter/claim the interest income.

You only report the Interest earned. You do "NOT" include your purchase price of the CD.

VolvoGirl

Employee

Did they report the CD in the actual 1099B section as a Sale or did you get a consolidated 1099? That will have sections for 1099-Int and 1099-Div and 1099B. You need to enter each section in the right place. So read it carefully and look for headings…1099-Int for interest or 1099-Div for Dividends and 1099B for sales.

I would think if they reported it as a 1099B sale you should enter it there. That's where the IRS will be looking for it. You would enter what you got when it matured and what you deposited to the CD originally as the cost. The difference would be the gain or interest. Maybe it wasn't a regular CD but an investment account.

I would double check with the broker or fund company about it.

bpk016Author

Yes, the form I have has box for each DIV, INT, and B, which is also why I assumed I would file it under a 1099-B sale.

jlkosta

TurboTax 2021 1099-B investment account redemption of mature bank CD - Sale Category

Note - mine was 'long-term'

My brokerage 1099-B stmt shows wording "Report on Form 8949, Part II with Box D checked. Basis is provided to the IRS"

GeorgeM777

It would appear that your best option for reporting the CD on Form 8949 is to report it as the sale of a bond. It appears as if your CD matured and you essentially received a return of your original investment. We assume that you have paid tax on the interest you received from the CD, whether such interest was paid during the year, or whether the CD was a zero-coupon CD which you purchased at a discount and paid tax on the "imputed interest" that was earned each year.

The IRS instructions for Form 8949 provide the following with regard to how a matured CD should be reported:

"You shouldn't have received a Form 1099-B (or substitute statement) for a transaction merely representing the return of your original investment in a nontransferable obligation, such as a savings bond or a certificate of deposit. But if you did, report the proceeds shown on Form 1099-B (or substitute statement) in both columns (d) and (e)."

Column (d) on Form 8949 is the column for proceeds and Column (e) on Form 8949 is the column for cost. As noted above, if you are just reporting a return of your investment in the CD, then select the option for bonds and enter your proceeds and cost information accordingly.

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