# Short Term Capital Gain



## cuerna1 (Mar 7, 2015)

We have an account in which we purchase government bonds directly from the government. There is a mutual fund like device where the money sits while waiting for investment. In 2014 we earned 85.64 USD in short term capital gains. There is really no basis. In / on which box / line of the schedule D can I place this amount ? Is there a form I can dummy up which can then pull the amount onto the Schedule D ? That is what I did for the 1099-INTs to represent the interest from our foreign accounts. THanks.


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## BBCWatcher (Dec 28, 2012)

cuerna1 said:


> There is really no basis.


Oh, there is. Otherwise nobody could tell you what the gain is. Go back into your financial statements for that account if necessary to determine how that $85.64 was calculated. There's only one way, really: sales price minus purchase price (taking into account commissions if applicable). So if you know $85.64 and the sales price but don't know the purchase price, you can easily calculate the purchase price (cost basis). As long as you've got any two out of three you can solve for the third.

But your description suggests you received interest rather than a short-term gain. Are you sure it's a short-term gain? A short-term gain means you bought something (a bond in this case) and sold that same thing (or part of that same thing) within one year, and there was a gain between the purchase and sale. Interest is something a financial institution pays on a balance, for example. Your description suggests the latter.

If it is indeed a short-term gain, you also need IRS Form 8949. In Part I on Form 8949, check the "C" box ("Short-term transactions not reported to you on Form 1099-B") since foreign accounts don't generate 1099-B forms, then proceed from there. You'll then carry what you report on Form 8949 onto Schedule D. (Schedule D refers to IRS Form 8949, as a matter of fact.)


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## cuerna1 (Mar 7, 2015)

BBCWatcher said:


> If it is indeed a short-term gain, you also need IRS Form 8949. In Part I on Form 8949, check the "C" box ("Short-term transactions not reported to you on Form 1099-B") since foreign accounts don't generate 1099-B forms, then proceed from there. You'll then carry what you report on Form 8949 onto Schedule D. (Schedule D refers to IRS Form 8949, as a matter of fact.)


Thanks for the reply. They are short term gains. When we deposit money into the account it sits there for a few days until the next government auction. It has to sit somewhere so they put it into a daily bond fund. There are many such transactions in this account. In a sense it is like a money market account. There is no other way for me to report this 85.64 but to list all the purchases and sales ? Near the top of the Schedule D - under miscellaneous options is a checkbox A which says "Are one or more statements describing stock sale details being attached to form 8949 instead of providing those details on the form ?" - What do you think - can I send them my statements and then enter my 85.64 as a total somewhere on the Schedule D ? If so where would I do that ?


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## Bevdeforges (Nov 16, 2007)

Don't send the IRS any of your statements. They have no clue what to do with them. (I think that's why they have 1099s in the first place! <g>)

For that meager sum of money, I'd be very tempted to just report it as if it were interest - i.e. on a Schedule B, or just add it to whatever other sum you report on the line on the 1040 for interest income. If you put it on the Schedule B (which you have to file anyhow, to tick the box about foreign bank accounts), put the name of the fund where the money is held and if they have questions about it, they'll be in touch. But at least you have fully disclosed the income.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

Also check PFIC rules to see if they apply. (Probably, I'm afraid.)

You are allowed to use the word "Various" for buying and/or selling dates, though you shouldn't get any less specific than one line per holding (a bond fund in this case).


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