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Originally Posted by retiredguy123
I don't buy any CDs, so I am not very familiar with how the interest works. But, it is definitely not imputed interest. I use short term bond funds and cash reserve funds for my cash investments. I assume that your investment company will track any taxable interest on your CDs and include it on the annual 1099-div form. I would trust their calculations, especially if it is Fidelity or Vanguard. I think you are going to pay taxes on any CD interest accrued during the year where the CD maturity date extends beyond the tax year, even if you did not receive any interest payments. Good luck.
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Thanks. It is good to know we were talking about two different types of CDs. I was beginning to think my question was making no sense at all because I had not been clear enough or I was being a dingbat.
Turns out, we were just talking apples and oranges…..or maybe apples and apple pie.
Regarding imputed interest, I did not really think that was it either, but happened to derail a bit from the CD topic at hand because I think the 1990s must have called. That’s the last time I heard of imputed interest being a factor and that was only with mortgage papers held privately.
I think mortgages back then were somewhere in the 8% range. A person-to-person mortgage could be at more than the going CD rate but less than the market’s mortgage rate, but supposedly not by a whole lot. Don’t know why. Such a loan would certainly not be usury lending. That’s the opposite, of course.
Oh well, that was a long time ago and that part was way off track anyway. This thinking I do about taxes is a curse for me sometimes. Sends me down a rabbit hole.
Boomer