I have 5-year foreign (Brazilian) certificate of deposit that pays interest only at the maturity date (Sept/2026). So, in the meantime, I will have only accrued interest and AFAIK it needs to be reported to the IRS. However, how do I do that in the turbotax desktop?
Questions. Let's assume that in 2023 the CD accrued an interest of USD 1000.
- Although I don't have a 1099-INT, I went to Income->Interest and added a USD 1000 entry. Do I need to modify this entry by adding an adjustment of USD 1000 and select accrued interest in order to say that it is an accrued interest I earned?
- IIUC, I can get a foreign tax credit (FTC) for this accrued interest. However, when I go to Credit & Deductions, turbotax says that it did not detect any FTC in the 1040. Do I need to go back to the USD 1000 entry added and modify it by including a FTC value? Wait, but I did not pay tax for this CD yet, tax will be withhold in Brazil only at maturity date.
- In 2026, the bank will pay the total 5-year interest and also withhold tax at the maturity date. However, I think in 2026 I should report to the IRS only the part that relates to 2026 (interest and FTC). Is that right?
Thank you,
Claudio
