Quote:
Originally Posted by Haggar
It's taxable when the interest is actually credited to you account even if there are restrictions on the CD - not on an accrued basis.
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Thanks. Years ago, I had a zero coupon bond that never credited any interest. But, I still had to pay income tax on the "imputed" or "phantom" interest every tax year. Isn't that the same way a long term bank CD works? I thought that, even if the bank doesn't actually credit interest to your account, the IRS still wants to tax you on interest every year.