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Subject Author Date
CD maturity and 1099 and roll into a new CD GORILLA 12-10-2006
Posted by GORILLA on December 10, 2006, 8:26 pm
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 1. Can matured CD be rolled into a new CD complete with
earnings (without generating a 1099 and the related tax on
earnings?

2. Can a "Promotional CD" That is a one time offering" (can
not be renewed) be rolled into a new CD without 109 being
generated.

Where am I coming from?

On Social Security. Not enough "other income" to cause
Social Security to be taxed.

...but have a large CD(s) that generates enough interest at
maturity to cause Social Security to be taxed. To prevent
that tax event, one needs to somehow roll the CR principal +
earnings into a new CD.

The problem is not so severe with a 60 month CD, but having
12 and 24 months CDs creates tax issues from the 1099s every
year.

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Posted by Victor Roberts on December 12, 2006, 1:37 am
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> 1. Can matured CD be rolled into a new CD complete with
> earnings (without generating a 1099 and the related tax on
> earnings?
>
> 2. Can a "Promotional CD" That is a one time offering" (can
> not be renewed) be rolled into a new CD without 109 being
> generated.
>
> Where am I coming from?
>
> On Social Security. Not enough "other income" to cause
> Social Security to be taxed.
>
> ...but have a large CD(s) that generates enough interest at
> maturity to cause Social Security to be taxed. To prevent
> that tax event, one needs to somehow roll the CR principal +
> earnings into a new CD.
>
> The problem is not so severe with a 60 month CD, but having
> 12 and 24 months CDs creates tax issues from the 1099s every
> year.

I believe it all depends upon when the bank pays interest.
It is not up to you. Most CDs pay quarterly and will
therefore generate income. I remember years ago a CD that
was advertised as "tax savings" in that it would not pay
interest until the end of the term, which was in the next
tax year.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Steve Pope on December 13, 2006, 10:00 pm
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>> 1. Can matured CD be rolled into a new CD complete with
>> earnings (without generating a 1099 and the related tax on
>> earnings?

> I believe it all depends upon when the bank pays interest.
> It is not up to you. Most CDs pay quarterly and will
> therefore generate income. I remember years ago a CD that
> was advertised as "tax savings" in that it would not pay
> interest until the end of the term, which was in the next
> tax year.

Yes, but one year is the limit -- if they give you a five
year CD that doesn't pay any interest until year five, the
IRS would impute interest as you go along. So to simplify
things, banks won't defer interest payments past one year.

Steve

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Arthur Kamlet on December 12, 2006, 1:37 am
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> 1. Can matured CD be rolled into a new CD complete with
> earnings (without generating a 1099 and the related tax on
> earnings?

No.

> 2. Can a "Promotional CD" That is a one time offering" (can
> not be renewed) be rolled into a new CD without 109 being
> generated.

No.

> Where am I coming from?

And where are you going?

> On Social Security. Not enough "other income" to cause
> Social Security to be taxed.
>
> ...but have a large CD(s) that generates enough interest at
> maturity to cause Social Security to be taxed. To prevent
> that tax event, one needs to somehow roll the CR principal +
> earnings into a new CD.
>
> The problem is not so severe with a 60 month CD, but having
> 12 and 24 months CDs creates tax issues from the 1099s every
> year.

The 12 month CD will pay its interest and so you declare itg
as taxable at that time.

The 24 month CD has a term of More than 1 year. In that
situation, you have to decl;are as income, and will get a
1099 for accrued interest every year, and noit one humongous
interest income once, when the CD matures.

So if you have a 5-year CD don't worry about having to
declare interest income as a lump sum in 5 years. You will
declare a smaller amount of income each year.

__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by A.G. Kalman on December 12, 2006, 1:37 am
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GORILLA wrote:

> 1. Can matured CD be rolled into a new CD complete with
> earnings (without generating a 1099 and the related tax on
> earnings?
>
> 2. Can a "Promotional CD" That is a one time offering" (can
> not be renewed) be rolled into a new CD without 109 being
> generated.
>
> Where am I coming from?
>
> On Social Security. Not enough "other income" to cause
> Social Security to be taxed.
>
> ...but have a large CD(s) that generates enough interest at
> maturity to cause Social Security to be taxed. To prevent
> that tax event, one needs to somehow roll the CR principal +
> earnings into a new CD.
>
> The problem is not so severe with a 60 month CD, but having
> 12 and 24 months CDs creates tax issues from the 1099s every
> year.

No and no. When the CD matures the interest is made
available to you as taxable gross income.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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