Accrued bond interest

Forum|Forum|2 years ago
February 20, 2024
2 replies
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I purchased some bonds on the secondary market in 2023. I have earned $50 in interest and $720 in accrued interest.
I assume the $720 should be deducted from my taxable income, so I tried entering it in turbotax while filling my 1099-int. During the turbotax review, I see this warning:

Adjustments [$720] reported on this form 1099-int are greater than the total interest income [$50]. Review and make adjustments if necessary.

In the form turbotax shows me, its correctly identified the accrued interest I entered as accrued interest. Box A for accrued interest is checked.

Did I enter something wrong, or should I ignore the warning?

TurboTax Deluxe Online

Best answer by Mike9241

the accrued interest deduction on the bond is limited to the interest income received on the bond in 2023. the rest would offset the interest received in 2024.

Mike9241Answer

the accrued interest deduction on the bond is limited to the interest income received on the bond in 2023. the rest would offset the interest received in 2024.

tryo123Author

Thanks! Does this mean that for 2023, i should claim the amount equal to my interest from the bonds (50$), and jot down the remainder? Then in 2024, i can use the rest?

ie 720-50=670 is what will be left for next year?

RobertB4444

That is exactly what that means.

@tryo123

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