Dividends On A CD That Are Eligible For Withdrawal

BCloonan | Jul 29, 2016 | 3 posts since 2016

I am the Treasurer for an organization that falls under IRC 501(c)(10), Domestic Fraternal Societies. Our "Lodge" has a CD and my CD Monthly Statement tells me that I can withdraw "xxxx dollars" from the account. My questions is, will we have to pay taxes on this withdrawal. In reading the above shown IRC I believe that we are exempt from paying taxes on this. Please advise.

Post an answer

Answers

ChrisCD | Jul 29, 2016 | 134 posts since 2010

If you are a tax exempt entity, you won't have to pay taxes. The bank may send a 1099 to the IRS indicating interest was paid, but tax exempt entities don't pay taxes. You can check in with the bank to make sure they have your account flagged as tax exempt. They may need an updated W9 to do that if it isn't already set-up in that manner. And for the record, I am not an accountant so if this seems contrary to your understanding, may be good to seek professional advice. cd :O)

BCloonan | Jul 29, 2016 | 3 posts since 2016

Thank you for your quick reply. I will check on the W9 form when the bank opens on Monday.

Ally6770 | Jul 29, 2016 | 4,292 posts since 2010

I was a township treasurer for 23 years. I never was sent a 1099 for any of the accounts during the time. When you sign the signature cards you check it as tax Always keep a copy of the signature card for your records and for the auditor.

BCloonan | Jul 29, 2016 | 3 posts since 2016

Good information...thank you for your input.

Ally6770 | Jul 29, 2016 | 4,292 posts since 2010

Just reread what I wrote. You check the box (under penalty of the law) that you are tax exempt.

The financial institution, product, and APY (Annual Percentage Yield) data displayed on this website is gathered from various sources and may not reflect all of the offers available in your region. Although we strive to provide the most accurate data possible, we cannot guarantee its accuracy. The content displayed is for general information purposes only; always verify account details and availability with the financial institution before opening an account. Contact [email protected] to report inaccurate info or to request offers be included in this website. We are not affiliated with the financial institutions included in this website.