One more question us treasuries accrued interest

Forum|Forum|1 year ago
March 21, 2025
1 reply
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Doing 2024 taxes and TT has yet to make this straightforward. Sigh.

I want to follow the advice above about moving Treasury Obligations interest to a separate 1099-INT, but not sure which box to use. I am guessing Box 5 (Investment Expenses) but hoping someone can confirm this or point me to the right Box

LindaS5247

Box 3 on Form 1099-int is for Interest on U.S. Savings Bonds and Treasury Obligations. The instructions for Form 1099-INT state to enter interest on U.S. Savings Bonds, Treasury bills, Treasury notes, and Treasury bonds.

Box 5 is for For single-class REMICs only, see Box 5. Investment Expenses under Rules for REMICs, FASITs, and Issuers of CDOs. This amount is not deductible.

Click here for Instructions for Forms 1099-INT and 1099-OID (01/2024)

The accrued interest is taxable to the seller, whereas the interest that is earned from the date of purchase to the end of the year is taxable to the purchaser.

It sounds like you are issuing a Form 1099-INT, but I am not sure. You state you want to "follow the advice above", but it is not there to refer to. If this does not help, please come back to Community and provide some additional information so we may better help you.

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PMSAuthor

Employee

Regarding my US Treasury Obligations my 1099-INT shows interests I earned but also Accrued Interest that I paid to the seller. The provider of this 1099 told me that my earned interest was not adjusted for the interest I paid. So I believe I am entitled to reduce my total interest by the Accrued Interest I paid.

I was able to get the numbers I expected by checking "I need to adjust the interest reported on my form." on the screen that follows 1088-INT screen, and on the next screen entering the accrued interest amount and selecting "My accrued interest" from the "Reason for adjustment" drop down.

If you think my belief that the Accrued Interest should be creditable back to me is incorrect, let me know. This seems like a reasonable assumption, but then none of the 1099 provider, the IRA instructions nor Quicken made this very straightforward.

PMSAuthor

Employee

As I mentioned in my previous post, I am going ahead with my assumption about reducing my Federal Interest based on the accrued interest I paid for these US bonds. Now I ran into another problem. While doing my CA taxes I see that TT subtracts a smaller amount from my interest than the adjusted federal interest. I tried clicking on Line 1, Column B on the CA Interest and Dividend Adjustment Worksheet, but this does not link me to anything (which is annoying). Can anyone explain this?