@Juancar ,
the ref article is saying the same thing -- constructive receipt. IRC Sections 861, 1272, 1273, 1274 and 1275 in looking at CDs , especially foreign ones as OID ( Original Issue Discount ) equivalent, extends this "Constructive Receipt" further and actually likes a CD to a loan/ debt instrument with present value ( purchase price ) being a discounted future value i.e. an OID . In this interpretation, the incremental value ( value at redemption LESS original purchase price ) divided by the length of the contract is per day earning that needs to be recognized as income.
Thus it implies that you need to recognize and pay tax on interest earned during the tax year. Thus for your CDs that span over the year end , you recognize the earnings for the year ( allocated based on the interest rate times the number of days under contract in the current tax year).
Does this make sense ?
