How do I record the retirement of a Ginnie Mae bond?

GNMAs are mortgage-backed securities that are issued by the Government National Mortgage Association (a.k.a. Ginnie Mae) and guaranteed by the federal government. If you hold a Ginnie Mae bond until it returns all of its principal, it becomes worthless. You need to record this information in your investment account.

Open the account you want to use.
Click Enter Transactions.
In the Enter Transaction list, choose Sell - Shares Sold.
In the Security name field, select the bond.
In the Number of shares field, enter the face amount of the bond divided by 100.
For example, for a $250,000 bond, enter 2500.
In the Price received field, enter 0.
Identify the lots you want to use for this transaction.

Notes

Should there be a capital gain or loss when retiring a Ginnie Mae bond?
If the bond was purchased at face value and the return of principal was accurately recorded, you have no capital gains or losses (except for commissions).
If the bond was purchased after issue (either above or below the face value), there may be a gain or loss.
Should you record both Interest Income events and Return of Capital?
You record both interest income events and return of capital (which are not income and not taxable) during the life of a Ginnie Mae bond. The final payment (retirement of the bond) would be the same (interest and return of capital).

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