30 Jan I sold a Treasury bill. What happens with taxes?

Q. I sold a Treasury bill before maturity and my broker statement is treating it as a short term capital gain but with the note: “non-covered.” Could this be correct? I would love this to be true because I have capital losses that I can offset with the gain and not be subject to federal income taxes.
— Investor

A. You may want to double-check with your brokerage firm.

But here’s what you should know.

Gains or losses from selling assets you’ve held for a year or less are called short-term capital gains or losses, said Joseph Sarnecki, a certified financial planner with U.S. Financial Services in Fairfield.

Gains are generally taxed at the same rate as your ordinary income, he said.

“Certain times, brokers may not provide detailed cost basis reporting to the IRS on the sales of `non-covered’ securities,” he said. “In these situations, only your gross proceeds may be reported, therefore it is your responsibility to report the proper cost basis on non-covered securities to the IRS.”

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This story was originally published in January 2024.

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