Etrade and T-bills (new issues) and related questions

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Topic Author
student
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Joined: Fri Apr 03, 2015 6:58 am

Etrade and T-bills (new issues) and related questions

Post by student »

Learned about T-bills from this forum, I did a couple of trial purchases this past Tuesday at Fidelity. Due to certain terms, it was scary but everything was fine. viewtopic.php?t=377390 Thank you to all the posters who replied.

I now have two other questions.

1) According to https://thefinancebuff.com/treasury-bil ... arket.html I can buy new issues at etrade also. On etrade, I see on the page with fees and rates, it says $0 commission on US Treasury auction. To me, this suggests that new issues should be available. However, I do not see any new issues on Tuesday, or at least I don't know how to find them, but I did see secondary market ones. (For Fidelity, Vanguard and Schwab, I saw new issues on Tuesday.)

Some of you may wonder since I did trial purchases at Fidelity, why do I want to buy at etrade. This is because I am unable to leave money on the table. I was an etrade customers before but I transferred out to reduce the number of accounts. I got an email from them offering a bonus (for example, $100 bonus for a deposit of $5,000 and $200 bonus for a deposit of $25,000). So I opened an account with money normally in a HYSA. So I want to buy T-bills at etrade. Suppose I am only able to but them on secondary market, I have the following general question.

2) A friend told me that buying T-bills in secondary market causes additional work at tax time. When I was on hold with Fidelity on Tuesday, the agent reminded me that I can always buy on secondary market. I told him that I was concern about the extra work at tax time but he told me that I just have to report what is on the tax form (similar to other 1099's). So my question is are there any additional work or is it as simple as reporting interests using a 1099-INT?

Thank you.
cas
Posts: 2258
Joined: Wed Apr 26, 2017 8:41 am

Re: Etrade and T-bills (new issues) and related questions

Post by cas »

Tax issues have been discussed here and there in threads quite a bit in the last couple of months. Most, but not all, of the necessary numbers are on one or another 1099-foo somewhere. Some of it requires manual intervention in your tax program (i.e. It is not imported from your brokerage). It is a little fiddly - not inherently hard, but just new terminology and new tax reporting details - and there are ways to end up overpaying taxes, usually on small amounts. I would suggest searching on these terms in the forums:

"accrued interest paid to seller"
"amortized bond premium"
"accrued market discount"
"bond de minimis rule"
Topic Author
student
Posts: 10764
Joined: Fri Apr 03, 2015 6:58 am

Re: Etrade and T-bills (new issues) and related questions

Post by student »

cas wrote: Sat May 14, 2022 1:17 pm Tax issues have been discussed here and there in threads quite a bit in the last couple of months. Most, but not all, of the necessary numbers are on one or another 1099-foo somewhere. Some of it requires manual intervention in your tax program (i.e. It is not imported from your brokerage). It is a little fiddly - not inherently hard, but just new terminology and new tax reporting details - and there are ways to end up overpaying taxes, usually on small amounts. I would suggest searching on these terms in the forums:

"accrued interest paid to seller"
"amortized bond premium"
"accrued market discount"
"bond de minimis rule"
Thanks. I will read the thread.
Topic Author
student
Posts: 10764
Joined: Fri Apr 03, 2015 6:58 am

Re: Etrade and T-bills (new issues) and related questions

Post by student »

I read the thread but I am still kind of confused. Suppose a 6-month T-bills was bought by someone for $998 (with $1,000 par value). Three month later I bought it at $999. At maturity, I receive $1,000. I assume that on the 1099, it will say $1 as interest and this is what I will report on my tax return. Is this correct? I feel that I am missing something.
Hebell
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Joined: Wed Aug 12, 2020 1:56 am
Location: Boca Raton, FL

Re: Etrade and T-bills (new issues) and related questions

Post by Hebell »

Find the CUSIP number for the bill or note or TIPS you want to buy.

Look for the announcement date for the opening or reopening.

https://www.treasurydirect.gov/instit/i ... m?upcoming

Place your order on eTrade or Fidelity after 2:00 p.m. on that date. Fidelity often takes till 2:00 p.m. to have the auction show, so that you can buy. ETrade is a usually late morning Eastern Time.

Until that time is reached, you will not see it available for purchase at auction.
Topic Author
student
Posts: 10764
Joined: Fri Apr 03, 2015 6:58 am

Re: Etrade and T-bills (new issues) and related questions

Post by student »

Hebell wrote: Sun May 15, 2022 10:26 am Find the CUSIP number for the bill or note or TIPS you want to buy.

Look for the announcement date for the opening or reopening.

https://www.treasurydirect.gov/instit/i ... m?upcoming

Place your order on eTrade or Fidelity after 2:00 p.m. on that date. Fidelity often takes till 2:00 p.m. to have the auction show, so that you can buy. ETrade is a usually late morning Eastern Time.

Until that time is reached, you will not see it available for purchase at auction.
Thanks for the info. I tried that last Wednesday and could not find it. Of course I could be too late. Have you purchased new issues with etrade before?
Hebell
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Joined: Wed Aug 12, 2020 1:56 am
Location: Boca Raton, FL

Re: Etrade and T-bills (new issues) and related questions

Post by Hebell »

Yes, I have bought new issues at eTrade.
Topic Author
student
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Joined: Fri Apr 03, 2015 6:58 am

Re: Etrade and T-bills (new issues) and related questions

Post by student »

Hebell wrote: Sun May 15, 2022 11:31 pm Yes, I have bought new issues at eTrade.
Thank you. I will try to look for new issues again this week.
Topic Author
student
Posts: 10764
Joined: Fri Apr 03, 2015 6:58 am

Re: Etrade and T-bills (new issues) and related questions

Post by student »

I called Etrade and the agent told me where to look for new issues T-bills. It is there, I just did not look at the right place.
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