Question

Jaxon (51) purchased a $10,000, 13-week Treasury bill as a short-term investment. He paid $9,960 for the security, which wasissued on June 17, 2022. When the bill matured on September 16, 2022, Jaxon received $10,000. How is the $40 in interestthat he earned on this investment reported on his return?

Answer 1

The $40 in interest earned on this investment should be reported as taxable income on Jaxon's return. Typically, interest income from investments such as Treasury bills is reported on Schedule B of the individual tax return form. Jaxon may receive a Form 1099-INT from the issuer of the Treasury bill, which will reflect the interest earned and should be included when filing his taxes.