Tax Question

Bob_Smith · 08-27-2004, 12:00 AM

I have individual TIPS and some are in a taxable account. My daughter is starting college, and if I can do a 1040A instead of a 1040, I will not be required to list my assets on the Student Aid application. The 1040A handles only interest, ordinary dividends, and cap gain distributions. Do TIPS throw off any other type of income that would force me to use a Schedule D/1040? I haven't owned them before and don't know how the 1099 classifies the inflation bump-up in TIPS. Anybody know?

wabmester · 08-27-2004, 12:35 AM

You'll get a 1099-INT for the interest and a 1099-OID for the principal adjustment. You just sum the two for your taxable interest income. I haven't filed a 1040A in a *long* time, so I have no idea if you're covered there.

IIRC, you bought your bonds on the secondary market at a premium. That may have complicated things, since the IRS will sometimes want you to amortize the premium. You probably want to talk to a CPA.

cute fuzzy bunny · 08-27-2004, 01:07 PM

Whats a 1040a?

Bob_Smith · 08-27-2004, 03:08 PM

Thanks Wab - I thought it was interest, but wasn't sure. I didn't know about the amortization. That sounds like trouble.

TH, I haven't used a 1040A for at least 25 years. I'll probably jump through these hoops for naught, but if it works, it could be worth a couple thousand in financial aid.

08-27-2004, 12:00 AM	#1
Bob_Smith Full time employment: Posting here. Join Date: Sep 2003 Posts: 902	Tax Question I have individual TIPS and some are in a taxable account. My daughter is starting college, and if I can do a 1040A instead of a 1040, I will not be required to list my assets on the Student Aid application. The 1040A handles only interest, ordinary dividends, and cap gain distributions. Do TIPS throw off any other type of income that would force me to use a Schedule D/1040? I haven't owned them before and don't know how the 1099 classifies the inflation bump-up in TIPS. Anybody know?

08-27-2004, 12:35 AM	#2
wabmester Thinks s/he gets paid by the post Join Date: Dec 2003 Posts: 4,461	Re: Tax Question You'll get a 1099-INT for the interest and a 1099-OID for the principal adjustment. You just sum the two for your taxable interest income. I haven't filed a 1040A in a long time, so I have no idea if you're covered there. IIRC, you bought your bonds on the secondary market at a premium. That may have complicated things, since the IRS will sometimes want you to amortize the premium. You probably want to talk to a CPA.

08-27-2004, 01:07 PM	#3
cute fuzzy bunny Give me a museum and I'll fill it. (Picasso) Give me a forum ... Join Date: Dec 2003 Location: Losing my whump Posts: 22,527	Re: Tax Question Whats a 1040a? __________________ Many an optimist has become rich by buying out a pessimist

08-27-2004, 03:08 PM	#4
Bob_Smith Full time employment: Posting here. Join Date: Sep 2003 Posts: 902	Re: Tax Question Thanks Wab - I thought it was interest, but wasn't sure. I didn't know about the amortization. That sounds like trouble. TH, I haven't used a 1040A for at least 25 years. I'll probably jump through these hoops for naught, but if it works, it could be worth a couple thousand in financial aid.

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