Thank you. Yes, I am familiar with those issues on brokered CDs. I have the ability to calculate whether or not it would be profitable to sell on the secondary market and I know that the fees and spreads are typically steep. There are 2 CDs I am considering selling and the fees alone would be $500.
These are not long term CDs so it isn't a critical issue just to let them mature. In some cases people might need the cash so that is why they sell. But in my case there are other reasons I may want to sell.
The part I was least sure of is whether the difference between the purchase price (which in the case of an original issue like my CDs is the maturity value) and the price you sell the CD for is a capital gain or loss or whether it is counted as interest (or a subtraction from interest). Some of these secondary market fixed income securities seem to have funky rules about that (treating what seems to be a capital gain/loss as interest instead) and I am not very familiar with the brokered CD secondary market tax rules.
But you are saying that if I sell at a discount from the purchase price that would be treated as a capital loss. That seems to be the most expected answer so I will assume for now it is correct. I will also check with the broker and see if they can confirm that and also if they actually show the capital loss on the 1099.
Thanks again.
