TIPS Tax Question

[Pointby2]

I have a 1099-B for two $5,000 TIPS from 2014 that were redeemed this year. They are listed as "Long-term Noncovered Securities" They both were redeemed at $6,807.45 each. Only the gross proceeds were reported to the IRS with no basis. Since I've been paying OID taxes on these every year on these do I not have to report the sale? I've googled like crazy!

From the IRS site:
A "non-covered" Treasury marketable refers to a Treasury Note or Bond that was purchased prior to January 1, 2014, and an FRN or TIPS that was purchased prior to January 1, 2016. Treasury bills are considered non-covered Treasury marketable securities regardless of purchase date and are therefore excluded from reporting.

 

[GrayHare]

I've not redeemed TIPS so can't speak about specifics, but in general for a non-covered security, you list the sale on Schedule D and there specify your purchase price (which is the basis).

 

[VanWinkle]

• AI is your friend- here is the AI response:
• 
  
• 
  
• When a TIPS bond matures, you receive the adjusted principal value. If the adjusted principal is higher than the original principal due to inflation adjustments, the difference has already been taxed annually. So, you aren't taxed again on that portion at maturity.
  
  
• However, if there is any accrued interest from the last interest payment, that is also taxable income.

 

[oldtimer]

Treasury Bills have a duration of 52-eeks or less from date of original auction. TIPS have a duration 5-yr, 10-yr, 20-yr fromdate of initial auction.