Thank you for your answer.
I tried reading Publication 550, about accrued interest, and could not find anything about your last sentence.
The person getting the accrued interest, has to include it in come for that year, regardless of payment date. So why should the payer of accrued interest have to wait to subtract it on sch B until the next payment dateif it in the following year? I'm looking for something in print that says this.
I agree with you that this could be abusive, if I pay accrued interest in late December, and the next payment is in January, and I subtract the accrued interest in year 1, but don't include the interest earnings until year 2.
I have searched the web but have come up empty. I did the calculation and in my case its <$500, so no big deal. I just want to report it right.
It seems Turbo Tax will accept any figures as long as total interest is positive, since accrued interest paid is not reported to the IRS.
