Tax rate for earnings from Mexican CETES investments.

[jcmh_82]

How much taxes do I need to pay on earnings from investments in mexican CETES? and is inflation something I can deduct from the taxes?

[DianeW777]

You could include the amount of interest earned or accrued each year on your tax return. If you do not or have not report the earnings each year, then when they are redeemed or cashed in, the interest is includable in your taxable income the same year.

It's unclear what you mean about inflation deductions however, only actual expenses used to purchase investments would be allowed to offset any income for a particular investment.  

Please update here if you have more questions and we will help.

[jcmh_82]

Thanks for the response.

Follow up question, interest earnings count as income? or capital gains? what would be the rate to pay taxes on the interests earned?

[DavidD66]

Interest is taxed as ordinary income, not as capital gains.  Unlike the tax rate on capital gains, which have their own tax rates (determined by Adjusted Gross Income), there is no special or separate tax rate for interest income.  Instead, it is just included with other ordinary income.