@Mo Q
I think it's this (Though I can't know your actual details)...so see if this is your situation.
When you get a 1099-INT that has $$ in any combination (2 or more) of boxes 1, and/or 3., and/or 8. reported on it.
And if then you enter the Accrued Interest paid on the follow-up page...there is no designation as to whether that accrued interest was for bonds related to the box 1,3,or 8 $$ entries...and the software then just divides up the accrued interest proportionally against each of the three box values....which of course, is wrong.
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When you have accrued interest to report on a purchased bond, where $$ are reported in any 2-or-more boxes 1,3,8?.....what you have to do for that bond-type, is to remove all the $$ into it's own 1099-INT, and then report the accrued interest there.
Thus, if the accrued interest was for municipal bonds, you need to remove box 8 $$ (9 &13 too) from a combined 1099-INT, and put those $$ into it's own 1099-INT, and then the accrued interest gets applied to that specific bond-type's $$ amount. No need to subdivide box 8, 9 & 13 if you hold multiple Muni bonds....just take the whole set of $$ reported into its own 1099-INT.
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IF you purchased Corporate bonds with accrued interest....it would be boxes 1&11 in their own 1099-INT
IF you purchased Treasury bonds/notes with accrued interest....it would be boxes 3 &12 in their own 1099-INT.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
