The difference depends on if the notes are Original Discount Notes (OID) or Market Discount notes.
- OID notes purchased directly from the Treasury at a discount (e.g., zero-coupon bonds) typically report the difference between the purchase price and face value as interest income on Form 1099-INT. This seems to apply to your $13K notes. In this case, there was no interest paid.
- Market Discount notes purchased on the secondary market at a discount may generate capital gains if sold or redeemed. The $50K notes likely fall into this category, which is why you received a Form 1099-B. The gain is treated as a capital gain because the discount is considered a market discount rather than an OID.
- Interest Income: The accrued interest (e.g., $62.84) is reported on Form 1099-INT and taxed as ordinary income. Also
Capital Gains: The difference between the settlement amount ($48,433.84) and the face value ($50,000) is reported on Form 1099-B as a short-term capital gain. You would pay taxes on both the interest and the capital gains.
The reason you didn't receive a 1099B for the OID notes is because there was no interest paid on them. It appears you redeemed these at face value.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
