Help: EJ Brokered CD - Market Discount, Gain, & Interest
Hello, could someone take a look at this and let me know if I'm on the right track? I had a 3 year old brokered CD mature in 2021, originally inherited, and I'm trying to figure out how to enter this on tax forms.
Edward Jones Consolidated 1099 Statement shows:
Total LT Covered
$5,000 proceeds
$4980.00 cost basis
$20.00 unadjusted gain/loss
$30.00 accrued market discount
$480.00 interest income (includes intest from this and other CDs I still have)
It also says that the unadjusted gain/loss has NOT been adjusted for the accrued market discount.
I had not elected to accrue the market discount prior to maturity.
I'm thinking this needs entered on tax forms as such:
$20.00 as a long term capital gain on Schedule D
$30.00 as interest income on Schedule B
$480.00 as interest income on Schedule B
Does this look right? Some things I read made me think the $26.44 should be subtracted from the gain since it's being reported elsewhere as interest.
Edit:
OK, after further digging, I found some relevant info in the Form 8949 instructions. It looks like maybe I need to use Form 8949 and the Worksheet for Accrued Market Discount Adjustment in Column (g). So, the lower of the unadjusted gain and market discount does get subtracted from the capital gain, but is done as an adjustment on Form 8949. And in this case, $20.00 is lower, so that is subtracted from the capital gain making it $0, and $20.00 is added as interest income. Since the Market Discount $30.00 is the larger number, it's only entered in the Worksheet for Accrued Market Discount Adjustment and not anywhere else. Seems odd, but that's the best I can figure. Does this sound right?
Hello, could someone take a look at this and let me know if I'm on the right track? I had a 3 year old brokered CD mature in 2021, originally inherited, and I'm trying to figure out how to enter this on tax forms.
Edward Jones Consolidated 1099 Statement shows:
Total LT Covered
$5,000 proceeds
$4980.00 cost basis
$20.00 unadjusted gain/loss
$30.00 accrued market discount
$480.00 interest income (includes intest from this and other CDs I still have)
It also says that the unadjusted gain/loss has NOT been adjusted for the accrued market discount.
I had not elected to accrue the market discount prior to maturity.
I'm thinking this needs entered on tax forms as such:
$20.00 as a long term capital gain on Schedule D
$30.00 as interest income on Schedule B
$480.00 as interest income on Schedule B
Does this look right? Some things I read made me think the $26.44 should be subtracted from the gain since it's being reported elsewhere as interest.
Edit:
OK, after further digging, I found some relevant info in the Form 8949 instructions. It looks like maybe I need to use Form 8949 and the Worksheet for Accrued Market Discount Adjustment in Column (g). So, the lower of the unadjusted gain and market discount does get subtracted from the capital gain, but is done as an adjustment on Form 8949. And in this case, $20.00 is lower, so that is subtracted from the capital gain making it $0, and $20.00 is added as interest income. Since the Market Discount $30.00 is the larger number, it's only entered in the Worksheet for Accrued Market Discount Adjustment and not anywhere else. Seems odd, but that's the best I can figure. Does this sound right?
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