Hello Turbotax Community,
I have several CDs in a foreign institution in Spain. They all started in January 2024 and they all spanned into 2025. Most of the CDs had a maturity of 12 months (January 2024 to January 2025), but a couple of them have a maturity of 18 months (January 2024 to July 2025). They all only pay the interests at their maturity. I have checked with the bank and said I will not receive the equivalent of a 1099-INT until next year because in the eyes of the Spanish legislation that income belongs to the 2025 fiscal year.
I have been asking some people and they are all giving me different answers. I have read some parts of publication 550 and I am still confused.
When do I need to report that interest here in the US? Is it the same rule here in the US and report all income in 2026? Or is there a difference if the CD is 12 months or 18 months?
After reading Pub 550 I am getting the impression that if the CDs have a maturity of 1 year and pay the interest at their maturity, then I will need to report that interest in 2026 (even if they span over two fiscal years). However, the18 month CDs should be reported each year even if the bank has not paid yet that interest, meaning I would have to report a "phantom" interest for 2024 (basically, to estimate how much I would have accrued over those 11 months) and then in 2026 declare the remaining 7 months. Am I right?
Thank you in advance for your help.
