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sbchapp
New Member

Cost Basis on Inherited CD

Why would I receive a 1099-B on an inherited CD (TOD) that was allowed to mature (i.e., not cashed out prior to maturity)?  Everything I read states that the face value of the CD is non-taxable to the recipient.  This was a 15-month CD with semi-annual interest payments, which the decedent received before her death.  I received the final 3-month interest payment and also received a 1099-Int. on this income.  I just don't understand the additional capital gain due to the cost basis assigned to the CD on the date of death. Is there any special calculation method of cost basis for a CD that has semi-annual interest payments?  Furthermore, why would I be responsible for a capital gain on a CD that was held until maturity?  It was originally purchased at par, NOT on the secondary market.  

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