GeorgeM777 - I belive I explained all of that above. Also as I explained, checking the box for the last item on the screen, and entering the adjustment amount results in the code "O" in field 1f of form 8949. That is not the correct code. It should be "D". The only solution I have found so far is to switch to "forms view" and manually override the "O" and change it to "D" for the specific entries on form 8949.
The question I am asking is whether anyone has found a way without using a manual form override to adjust the basis and automatically get the "D" code in field 1f. So far no one has. Note that if you don't specifically adjust the basis (by entering the negative amount of market discount), TurboTax does put the "D" in field 1f, and the form actually says it adjusted the basis (showing a gain of 0), but it doesn't actually do it as I see the running tax refund (or owed) amount does not change. Only after making the adjustment, does the tax amount get affected. I think it's a bug in TT for a situation that they rarely see.
