Is this a long-term capital gain?

Question

I closed on a CD at my bank in 2006. Is this a long-term capital gain on my 2006 taxes?

Answer 1

NO.

A CD is usually purchased at a discount, then after a certain period of time,
it matures. The period of time between your purchase and maturity is then
paid to you as interest. The bank or financial institution issues you a 1099
for that payment of interest.

You report it as interest income on Schedule B of Form 1040.

Interest income is never considered income subject to capital gain treatment.
That treatment is only afforded to investments that are traded on an open market.

Answer 2

No, a CD is not an asset in the sense that you'd claim a capital gain on it. You don't "sell" a CD, it's just a type of depository account.

Exception: If you purchased it at a discount and surrendered it at a higher price at maturity then the difference would be taxable as a capital gain. The iinterest earned would be ordinary income, however.

Merely putting money in a CD is not a tax event in any case.

Answer 3

You can only have a capital gain on a CD if you bought it at a discounted price. Assuming you received the same principal you paid to purchase the CD and the interest that accrued, you only have to report the interest that was paid to you.

Answer 4

No. CDs earn interest income. There is no capital gain involved.

Answer 5

It would be interest (taxed at ordinary income rates), not a capital gain.

Answer 6

No.