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Where do I add bond premium. The tt program said to remove it from transferred 1099 oid and put it on schedule a I am not itemizing so is that not something irs looks at as I am taking std deduction

Forum|Forum|6 years ago
February 18, 2020
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It is a municipal bond that matured and the premium was more than tax exempt amount

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Best answer by AmyC

Now, we know more!

Let's confirm that you did:

Enter the 1099-OID following the steps above,
you did adjust the amount in box 10 to be the same as the amount in box 2.
The excess goes on Schedule A, line 16, other expense, but since you are using the standard deduction, you will not see a decrease in tax liability.

Instead, you can skip the step to enter the excess since you are not itemizing and that should solve your problem.

For more information, see pub 550

It will be reported correctly
You will have to pay the extra $10 in taxes.
There will not be any negative interest on the Schedule B.

[Edited 02/21/20 | 7:45pm PST]

DaveF1006

You will actually report this as an interest payment. I found this Turbo Tax link that outlines how to report this step by step..

Select Federal Taxes
Under Wages & Income select Interest on 1099-INT
Enter your 1099-INT information, select Continue
Select I need to adjust the taxable amount, select Continue
Enter the state that pays your tax-exempt interest, select Continue
Enter the amount of your premium adjustment as a positive number
Select the Reason for Adjustment

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E

erojohnAuthor

Hi Dave I did as your said, but when I entered as a positive number it carried through onto schedule As an ABP adjustment with minus in the amount column. The originals as on a form called norm 1099 OID. I did pay more than face value for a the bond and I didn’t think you could take a loss on a municipal bond. This still doesn’t make sense if I show it on the adjustment box in a negative number it should show up as a positive number in schedule B. I would rather pay an extra $10 dollars than not and trigger an audit and penalty. Is this number supposed to be an income item or a credit?

AmyCAnswer

Employee

Now, we know more!

Let's confirm that you did:

Enter the 1099-OID following the steps above,
you did adjust the amount in box 10 to be the same as the amount in box 2.
The excess goes on Schedule A, line 16, other expense, but since you are using the standard deduction, you will not see a decrease in tax liability.

Instead, you can skip the step to enter the excess since you are not itemizing and that should solve your problem.

For more information, see pub 550