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Old 12-27-2008, 09:30 AM   #1
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Question for you tax experts

If I sell Treasury bonds on Dec 31, they will settle in 2009. Can I take the capital gain in 2008 and the accrued interest in 2009?
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Old 12-27-2008, 09:54 AM   #2
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Sorry, but no. Trade date is what counts, not settlement date for tax purposes.
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Old 12-27-2008, 11:19 AM   #3
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Sorry, but no. Trade date is what counts, not settlement date for tax purposes.
Here's what I'm thinking. The sales are reported to the IRS on Form 1099-B which is based on the trade-date. The interest is reported on Form 1099-INT which is based on the reception date (which, in this case, would be the settlement date).
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Old 12-28-2008, 06:44 AM   #4
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Originally Posted by FIRE'd@51 View Post
If I sell Treasury bonds on Dec 31, they will settle in 2009. Can I take the capital gain in 2008 and the accrued interest in 2009?
You'll be better off going with whatever is on your 1099s. It used to be that you could go with either the trade date or settlement date but it may have changed. I'd hate to disagree with Saluki9 over this but you could check the IRS publications to be sure.

If it is important to you to take the income in 2009, sell Jan 2. The price will be about the same but could go up or down slightly.
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Old 12-28-2008, 07:15 AM   #5
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Trade date is it! See IRS Schedule D information at the IRS Site. Too lazy to link it now!
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Old 12-28-2008, 07:20 AM   #6
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You'll be better off going with whatever is on your 1099s. It used to be that you could go with either the trade date or settlement date but it may have changed. I'd hate to disagree with Saluki9 over this but you could check the IRS publications to be sure.

.
Hey, I'm used to being disagreed with!

Direct from IRS Pub 550

Bonds Sold Between Interest Dates




If you sell a bond between interest payment dates, part of the sales price represents interest accrued to the date of sale. You must report that part of the sales price as interest income for the year of sale.
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