CD Interest Reporting

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Question:

Does the interest earned on a CD need to be reported to the TIN on file at the time of the interest posting or can it be redirected to a new TIN simply by changing the banks records?

Answer:

Generally, bank accounting systems only have the ability to report interest for a given account on one TIN- the one on file at year end. If for some reason ownership of an account changes mid-year, closing out the old account and reopening provides the cleanest way to allocate the interest paid; otherwise, the bank might have to create extra records to generate adjusted (and multiple) 1099's at year end.

First published on BankersOnline.com 10/08/07