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Level 1
posted Mar 6, 2024 8:44:13 AM

Classification of gain on Tbills

Hello! Over the course of 2023 I purchased US Govt Tbills at a discount and as they matured the profit was shown as "capital gain" by TD Ameritrade HOWEVER when I received my 1099 those gains were reclassified as interest income. 

 

What is the correct classification for the gain on Tbill's purchased at a discount (Interest income or Capital gain)? 

0 2 642
2 Replies
Level 15
Mar 6, 2024 9:02:08 AM

The difference between the full face value and the discounted value is the investor’s taxable interest.

 

 

T-bills are always purchased at a discount.

 

Level 1
Mar 6, 2024 9:25:20 AM

thank you for the reply 🙂