It depends. The 3520 form is informational only and does not have any taxable implications. Here you would report the full amount of $2000.
Since the extra $1000 is taxable interest earned on the original principal, this is the amount you will report on your tax return. Report this as such.
- Open TurboTax: Start by opening your TurboTax software and signing in to your account.
- Navigate to Income Section: Go to the "Federal" section and then click on "Wages & Income."
- Go to Investments and Savings (1099-B, 1099-INT, 1099-DIV, 1099-K, Crypto) Interest and Dividends if using Turbo Tax Desktop
- Go to interest 1099 INT
- When it asks to import information, mention you want to enter a different way
- Next screen, select interest
- Next screen indicate you will type this in yourself.
- Next will ask where you received this from. Enter provident Bank and record $1000 in Box 1.
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