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#1043539 - 09/16/08 08:29 PM tax reporting--certificate penalty
JimK Offline
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Joined: Oct 2002
Posts: 107
Alexandria, VA
When reporting interest paid on a certificate of deposit, if the certificate was closed early and penalty imposed. How is this treated tax reporting purposes (information return).
Jim
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Jim K

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#1088732 - 11/26/08 08:50 PM Re: tax reporting--certificate penalty JimK
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
The early withdrawal penalty is reported in a separate box. The interest earned goes in box 1 and the penalty in box 2. The interest figure should be the interest earned without any deduction for the penalty.

The taxpayer reports the two figures separately.
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John S. Burnett
BankersOnline.com
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#1302114 - 12/09/09 08:51 PM Re: tax reporting--certificate penalty John Burnett
JimK Offline
100 Club
Joined: Oct 2002
Posts: 107
Alexandria, VA
Box 1 and 2 related to IRS form 1099INT. My question concerns the Puerto Rico forms 480.6A and 480.6B. This form has a box (5) for reporting interest; but no corresponding box for early withdrawal penalty.
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Jim K

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#1302359 - 12/10/09 04:45 AM Re: tax reporting--certificate penalty JimK
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,224
Galveston, TX
Interesting question and since most of the instructions for the Puerto Rico information returns are in Spanish and I'm a little rusty - I couldn't decipher a definitive answer. You might want to just place a call to the Departamento de Hacienda Tel: (787) 721-2020 and ask them. From what I could decipher, it may not be reportable.
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