So at the end of the day, all we want to do is adjust the ordinary gain which would affect the ordinary tax rate. Here's a good way to go about this.
Personal Income/ Less Common Income/ Down at the bottom/ Miscellaneous Income/
then; next screen, Other income not already reported on a Form W2 or Form 1099
then; Did you receive any other wages-Yes
then; Continue,continue, continue until the screen Any other Earned Income-Yes
then; Source of Other Earned Income-Other
then in Description type in OID Prior adjustment with the amount as a negative 1,000
This will flow through to the Wages Wks Line 7 OID Prior Adjustment under the caption Other earned income
then carried forward to Line 1H Other earned income as a negative number.
Consequently, this will decrease your ordinary earned income and will reduce your tax liability by this amount.
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