On a Schwab 1099 Consolidated report, there is a mention of Amortization and Accretion Reporting for Fixed Income. Where does this get reported on the tax forms?
See Pub 550 Bond Premium, How to amortize, How to report
For the rest of you this is basically and adjustment to cost basis for bond premiums, OID etc reported on an annual basis, IF you've made the election to do so.
Generally an adjustment to interest earned, but if exceeds interest income, is a Sch A 2%
, Sultan of SnarkAll Star
I'm retiring and I have no pride left, so I'll answer.
I haven't a clue.
EDIT: But look what I found: http://www.americanbanker.com/glossary/a.html
Now all we need to do is figure out what a Z Tranche is.
, Help??All Star
For a professional answer you might want to ask this question of a paid support person. Those who choose to volunteer on this forum are not supported by Intuit.
Personally I would start IRS.Gov and search for accretion. I would then call Schwab and ask them for more information.
Seems I've stumped the pros and the IRS. I couldn't get a definitive answer from Charles Schwab nor the IRS either. From my conversations, it appears that the information is essentially a basis adjustment due to the purchase of the bond being above or below face value. But the difference shown by Schwab for the face value and the cost basis do not equal the amortization/accretion. It may be that the amortization/accretion is accumulative year to year. In any case, the information is not relevant until the bonds are sold. In my client's case, the bonds were not sold in 2011, so I have at least another year to worry about the basis effect.
My dictionary defines accretion as gradual growth or something added to increase growth.The word comes from the same root as accrue.
My interpretation is, since the account pays a fixed amount each period, some of the account's increase remains in the account, yet may, or may not, be currently taxable.
People come to Accountants Community for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:
- Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
- Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
- Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
- Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
- Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.