- 1). Add broker's fees or other transaction costs to the price you pay for a Treasury bill to determine your total investment. This is called your cost basis. For example, suppose you buy a T-bill with a $10,000 face value on the secondary market for $9,900 and pay $25 in transaction fees. Your cost basis is $9,925.
- 2). Adjust the cost basis when you sell a T-bill. Add any transaction costs incurred due to the sale to the cost basis. If your cost basis was $9,925 with $25 in sales fees, your cost basis is $9,950.
- 3). Subtract the total cost basis of your T-bill investment from the total proceeds of the sale. Do not include any interest earned in your sale proceeds. Interest earned on a T-bill is always ordinary income, not a capital gain. If the cost basis is greater than the sale proceeds, you have a capital loss and you'll get a negative number when you subtract cost basis from sale proceeds. Otherwise, you have a capital gain and your answer will be a positive number.
Suppose you sell a T-bill for $10,100 and your cost basis is $9,950. You end up with a capital gain of $150.
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