US Treasury Bill Interest - 1099-B vs 1099-OID vs 1099-INT

Forum|Forum|1 year ago
February 11, 2025
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Had a short-term US Treasury Bill that I held through maturity and resulted in $478 interest.

The Treasury Bill is listed on 1099-B as a short-term transaction "for which the basis is not reported to the IRS". The cost basis is shown as the same as the proceeds (amount received at maturity) and the Gain / Loss is reported as $0.

The Treasury Bill is also listed on 1099-OID with the $478 reported as the Original Issue Discount.

From looking at other answers in the TurboTax community, it looks like this interest should actually be reported on my 1099-INT so that I can then mark it as interest on US Treasury obligations and hence would not be taxed at the state level (in my case, Colorado).

Is this correct way to handle this? That means I'll remove the 1099-B US Treasury entry that automatically came through when transactions were downloaded by TurboTax. And I'd then manually create a 1099-INT entry in TurboTax.

DianeW777

No, that is not the correct way. The 1099-OID is reported under and the amount should be listed in Box 8 which should exempt it from your state return. This will still show up on your federal return as it should. If it is not in Box 8, you can list it there. This will exempt it from your state return.

Open your TurboTax return
Search (upper right) > type 1099oid > Open the FAQ (TurboTax Online) > Click 1099-oid original issue discount > TurboTax Desktop click the Jump to... link

The 1099-B should not be skipped. You would enter it with a sales/redemption price equal to the cost basis. The interest you included in your taxable income becomes part of your cost basis for the redemption.

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x9redhillAuthor

Thanks for the reply.

I did locate the 1099-OID and was able to get the $478 interest exempt from my Colorado return.

As I previously mentioned, the Treasury Bill is listed on 1099-B as a short-term transaction "for which the basis is not reported to the IRS". On the 1099-B, the cost basis is shown as equal to the proceeds ($75,000 redemption amount) - not the other way around as you stated in your response, in which case both would show $74,522. Are you telling me I should override these values on the 1099-B in TurboTax?

DianeW777

No, do not override. The 1099-B shows the cost and selling price as the same which should be the accurate zero gain or loss for this redemption.

@x9redhill

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feiwenw

1099-B US Treasury Bill form shows gain/loss with $0 amount, however the amount of cost basis and proceeds are different. Turbo tax is making the difference taxable, but the form shows $0 gain. Please advise. Thank you

Mike9241

is this type A - short-term basis and cost reported to iRS or more likely type B - short-term basis not reported to the IRS? if it's B, just change the cost to match the proceeds. The interest should be on your 1099-INT in box 3.

for type A enter the difference in the adjustment column so you have no gain or loss and enter code B

feiwenw

Thank you, Mike for your response.

Where I can find type A or B? It shows on 1099-B form only. Total gain is zero, but the detailed breakdown shows Gain/Loss with the positive difference. I uploaded the 1099-B directly from the brokerage who offers US Treasury bonds.

After I uploaded the 1099-B, Turbox tax shows zero in Summary, however the difference got taxed.

- question, where I can overwrite the number? Will it be a problem because the form reported to IRS is different than what I submit?