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Reporting proceeds
Q
I received a 1099B from my broker listing a $10,000 trade when my Washington State College Savings Bond Series 1989 (Zero Coupon Bond) matured this year. Since these bonds are tax free and not subject to federal capital gains, do I need to worry about entering the transaction on 1040 Form?
A
James A. Klotz responds:
Even if your matured bonds are tax-free, the IRS requires you to identify the source of the $10,000.00 in proceeds listed on your 1099.
Based on the original cost, munis can be subject to capital gains.
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