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Stocks, Bonds etc. -> Investing Tax Issues -> Treasury bills (T-bills)

Tax treatment of income from investments in treasury bills

This information is regarding treasury bills which are held outside of RRSPs or other registered accounts.

Treasury bills, or T-bills, are purchased at a discount from maturity value.  The difference between maturity value and purchase price is taxed as interest income.  If the T-bill is sold prior to maturity, a capital gain or loss will result.  See the glossary item on treasury bills for an example.  See also the Canada Revenue Agency (CRA) information on treasury bills and stripped bonds in their guide T4037 Capital Gains.

Tax Tip:  T-bills are better held inside a registered account, because 100% of the income is taxable when not in a registered account.

 

Revised: October 15, 2013

 

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