Q: My elderly father received a 1099-B Form (which I've never seen before) for about $1,000 in withdrawals last year from an American Express Certificate. He claims he has contributed more than that and does not have to pay any tax on the withdrawals. Does this seem right? M.R.R., Livingston, N.J.
A: Yes. You're referring to a "face amount certificate" transaction that is reported on Form 1099-B, Proceeds from Broker and Barter Exchange Transactions. A face amount certificate is a debt instrument that obligates the issuer to redeem the certificate at face value at maturity. The investor receives installment payments that include interest over the life of the certificate. Even though your father's withdrawal is equivalent to a return of capital, he still must fill out Schedule D indicating no capital gain or loss. Note: Taxable interest from a face amount certificate is reported each year on Form 1099-INT.