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babsr12
New Member

My investment sales are on Schedule D with a market discount which increases the basis as expected. Why is the amount of the market discount showing up on Schedule B?

 
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rjs
Level 15
Level 15
Intuit Approved! This answer has been verified for accuracy by an Intuit expert employee

My investment sales are on Schedule D with a market discount which increases the basis as expected. Why is the amount of the market discount showing up on Schedule B?

The accrued market discount is, in effect, additional interest that you earned on the bond. But you did not report it as interest income each year that you owned the bond, so you have to report it as interest income when you sell the bond.

 

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rjs
Level 15
Level 15
Intuit Approved! This answer has been verified for accuracy by an Intuit expert employee

My investment sales are on Schedule D with a market discount which increases the basis as expected. Why is the amount of the market discount showing up on Schedule B?

The accrued market discount is, in effect, additional interest that you earned on the bond. But you did not report it as interest income each year that you owned the bond, so you have to report it as interest income when you sell the bond.

 

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