Certificate of deposit(CD)

[wv-girl]

Is anyone, beside me, getting gouged by the insurance companies for home owners insurance? I realize that with the natural disasters the US has had in the past few years, the costs to ins companies has hit the max, but when they say that the costs for rebuilding your home, (should anything happen) has risen to the tune of approx. an additional 100,000.00. that sure seems like gouging to me. Sure would like to be able to re-sell at that price. Yeah, right. If you have a mortgage, it seems to be somewhat more reasonable, but if you don't, watch out, with no-one looking over their shoulders(meaning the mortgage people) the insurance companies can really sock it to you. So much for the american dream of actually owning your home free and clear. Our monetary(sp) system is set up so they only like you if you owe money. No wonder people put $ in their mattresses during the depression.

Debbie

 

[GGal]

"Hi folks,

I was recently given a 5000$ face value cd that matures in Dec. Does anyone know any ways to protect myself from the taxes when/if I cash it in?"

Tomato, Jack is absolutely correct.

When you received the CD as a gift, you assumed the donor's basis.

Assuming the donor paid $5,000 and had basis of $5,000 (I can't imagine why not), that means your basis is $5,000.

You should only be liable for tax on the interest you are earning.

GGAL

 

[Jackbnimble]

If it was a gift there will be no taxes when you "cash it in".
So you will only owe taxes on the interest and the money is yours free and clear. .

 

[Spaf]

Guys,

Sounds like you need some help!

Send your question to GGal, or an other CPA!

 

[ChemEng]

I believe Show-me is right also. The downside is that if you roll into an IRA, you wont be able to withdraw it. A Roth IRA would have the same option, but it would most likely be taxed as income.

I *think* there are ways to continue rolling CD's over without having to pay tax on it until you cash the CD in. Not sure on exactly how that is or not though.

Can anyone verify?

 

[Show-me]

I'm not a expert, but I would consider rolling it into a IRA CD or a individual IRA, if you have not made the max. IRS limits.

 

[Tomato4]

Hi folks,

I was recently given a 5000$ face value cd that matures in Dec. Does anyone know any ways to protect myself from the taxes when/if I cash it in?

thanks