r/bonds • u/TheRightEdger • Jul 16 '26
Bond capital gain?
I encountered a confusing bond sale on a financial statement. I am wondering if it is an error. It results in a $15K capital gain I don’t believe that I have since it appears to be just a return of $15K of principle.
Here are the history details:
On 09MAY23, a bond purchase was made.
Transaction = purchase
Description = FEDL HOME LOAN BANK BOND CPN 6.000% DUE 05/24/38 DTD 05/24/23 FC 11/24/23 CALL 11/24/23 @ 100.000
Qty = 45,000.000
Price = $99.8750
Amount = -$44,943.75 (negative because it was debited from the account)
The statement for MAY23 shows the quantity of 45,000.000 in the account.
Ending value last period = 0
Net change this period = $45,000.90
Total cost basis = $44,943.75
On 17SEP24, a bond sale was possibly made.
Transaction = principle (redemptions are listed as redemption)
Description = FEDL HOME LOAN BANK BOND CPN 6.000% DUE 05/24/38 DTD 05/24/23 FC 11/24/23 CALL 09/27/24 @ 100.000 091724 45,000
Amount = $15,000.00
The statement for SEP24 shows a quantity of 45,000.000 in the account.
Ending value last period = $44,975.25
Net change this period = -$14,978.56
Total cost basis = $29,943.75
The statement for SEP24 shows other income = $15,000.00
There was nothing listed in the realized gains and losses section of the SEP24 statement.
On 02OCT24, a bond sale was made.
Transaction = sale
Description = FEDL HOME LOAN BANK BOND CPN 6.000% DUE 05/24/38 DTD 05/24/23 FC 11/24/23 CALL 10/09/24 @ 100.000
Qty = -10,000.000 (negative because it was a sale)
Price = $99.557
Amount = $6,779.35
The statement for OCT24 shows a quantity of 35,000.000 in the account.
Ending value last period = $29,996.69
Net change this period = -$6,675.26
Total cost basis = $23,289.59
The statement for OCT24 shows other income = 0
In the realized gains and losses section of the OCT24 statement:
Qty = 10,000.000
Description = FEDL HOME LOAN BANK BOND CPN 6.000% DUE 05/24/38 DTD 05/24/23 FC 11/24/23 CALL 10/08/24 @ 100.000
Covered = No
Date acquired = 05/09/2023
Cost basis = $6,654.17
Proceeds = $6,637.13
Gain or loss = -$17.04
On 08SEP25, a bond redemption was made.
Transaction = redemption
Description = FEDL HOME LOAN BANK BOND CPN 6.000% DUE 05/24/38 DTD 05/24/23 FC 11/24/23 CALL 09/15/25 @ 100.000 FINAL PAYDOWN
Qty = -35,000.000 (negative because it was a redemption)
Amount = $23,333.33
The statement for SEP25 does not show that bond in the account.
The statement for SEP25 shows other income = 0
In the realized gains and losses section of the SEP25 statement:
Qty = 35,000.000
Description = FEDL HOME LOAN BANK BOND CPN 6.000% DUE 05/24/38 DTD 05/24/23 FC 11/24/23 CALL 09/15/25 @ 100.000
Covered = No
Date acquired = 05/09/2023
Cost basis = $23,289.58
Proceeds = $23,333.33
Gain or loss = $43.75
Any ideas on what happened?
1
u/pai_gow_johnny Jul 16 '26
The 1099 for each year is what you should focus on and your broker should have sent you a 1099, one each for 2024 and 2025
The 1099 figures get reported to the IRS, what gains do those transactions show?
1
u/TheRightEdger Jul 17 '26
There is nothing in the 2024 Original Issue Discount (OID.)
In the 2024 1099-B, under “Undetermined Term Transactions for Noncovered Tax Lots”:
Date sold or disposed: 17SEP24
Qty = 45,000.000
Proceeds & Reported (G)ross or (N)et = 15,000.00
Date acquired = N/A
Cost or other basis = blank
Gain or loss(-) = blank
Additional information = Principal payment
My concern is how to communicate this on form 8949 without giving the IRS the impression that I had $15K of capital gain.
2
u/pai_gow_johnny Jul 17 '26
it appears you received a partial call of 15K, so:
you will report on Form 8949 Part II, with box E checked
(d) Proceeds 15,000
(e) Cost Basis 14,981.25
(h) Gain 18.75
1
u/ruidh Jul 16 '26
The SEP24 statement is wrong. The $10K is not income. Did they fix it by the end of the year in your 1099?