Treasury bills (T-bills) and stripped bonds

When a T-bill or stripped bond is issued at a discount, and you keep it until it matures, the difference between the issue price and the amount you cash it in for is considered to be interest that accrued to you. However, if you sell the T-bill or stripped bond before it matures, you may have a capital gain or loss in addition to the interest accrued at that time.

Use the following to calculate your capital gain or loss:

Step 1 – Determine the amount of interest accumulated to the date of disposition

Step 2 – Subtract the interest from the proceeds of disposition

Step 3 – Calculate the capital gain or loss

Completing your Schedule 3

Report dispositions on lines 15199 and 15300 of Schedule 3.

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