Microsoft KB Archive/823031

= Sale of Treasury Bill Is Incorrectly Reported with Short-Term Capital Gains =

Article ID: 823031

Article Last Modified on 8/19/2003

-

APPLIES TO


 * Microsoft Money 2003 Deluxe Edition
 * Microsoft Money 2003 Deluxe and Business Edition

-



SYMPTOMS
When you view a tax report in Microsoft Money 2003 or you view the information that is exported to tax software, a Treasury bill is incorrectly reported with a short-term capital gain.



CAUSE
This problem occurs because Money reports the difference between the purchase price and the face value of a Treasury bill as short-term capital gains and not as interest.



RESOLUTION
To correctly record the selling of your Treasury bills in Money, follow these guidelines.

Note In this example, assume that you paid 99.5 for $10,000 worth of Treasury bills.
 * Record the sale of Treasury bills at the exact quantity and price that you paid. For example, if you paid 99.5 for $10,000 of Treasury bills, record 99.5 in the Price box and 10000 in the Quantity box.
 * Type that amount that matured in the Total box. In this example, type 10000 in the Total box.
 * Money calculates the difference between the sale price and the total value of your Treasury bills and enters the value as commission or accrued interest. Make sure that the difference ($50.00 in the example) appears in the Accrued Interest box.
 * Money will report this transaction as a sale of a security and export the value to a Schedule D item. Because the purchase price and the sale price are the same, the capital gains are reported as zero ($0.00).
 * Money will export the Accrued Interest of the Treasury bill sale to Schedule B.
 * If you paid a commission on the purchase of the Treasury bills, you must modify the sale calculation to include the commission in your basis. For example, if you bought $10,000 worth of Treasury Bills at a price of 99.5 and paid a commission of $25, then subtract the amount of the commission from the amount in the Accrued Interest box. Make sure that the amount in the Total box ($10,000 in the example) does not change and that the Commission box is empty. Money will modify the value in the Price box to reflect the commission.
 * Record the sale of the Treasury bill as a Sell transaction and not as a Redeem CD/Bond transaction.

Keywords: kbprb KB823031

-

[mailto:TECHNET@MICROSOFT.COM Send feedback to Microsoft]

© Microsoft Corporation. All rights reserved.