Treasury Bill Sale

[chessgm]

I acquired US Goverment Treasury Bills via auction, but then sold them before maturity. Schwab is reporting them on 1099B (not reported to the IRS) but I read somewhere I should be reporting them as interest. How are these treated tax wise? If they should be changed to interest, how do I do that in turbotax?

[DianeW777]

No, it is reported as a sale when a Treasury Bill is purchased and then sold. You may also have interest income to report for the holding period (date of purchase to date of sale).

When you bought the Treasury Bill you may have paid accrued interest to purchase, if so, this would also be part of your purchase price paid to the seller.

To enter your sale in TurboTax, follow these steps. 

1. Open or continue your return.
2. Navigate to the investment sales section:
   • TurboTax Online/Mobile: Go to investment sales. If using this application, make sure it is open
   • TurboTax Desktop: Search for investment sales and then select the Jump to link.
     • Or Personal Tab > Continue > I'll choose what I work on > Scroll to Investment Income > Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other
3. Answer Yes to the question Did you sell any of these investments in 2025? 
   • If you land on  the Investment sales summary or Your investments and savings screen, select Add More Sales or Add investments.
   • Click this link for more information. Where do I enter Investment Sales?

[chessgm]

Thank you for your quick reply.

I bought a 6 month T-bill at auction from the US government through my brokerage account, so the interest was left in the account. I sold it about 5 months later (1 month before maturity). I made $2,510.46 on the sale (final sale price - initial cost of T-bill at auction). Is there a calculation somewhere where I can figure out how much was interest and how much was capital gains?

[DianeW777]

If you received a 1099-INT, report that as interest income and then add it to the cost basis to report your sale of investment to determine your tax gain or loss. Be sure to select Bond for the type of investment. 

To determine the interest (or income) on a Treasury bill (T-bill) sold before maturity, calculate the difference between the sale price and your original purchase price, often adjusting for the time held. Interest is technically the pro-rated amount of the discount (difference between original price and maturity value) based on the days you held the security. 

@chessgm 

[chessgm]

I received a 1099-B for this transaction, not a 1099-INT

is there some way that TurboTax can do the math for me, or do I have to do it manually and input it manually somehow?