Thanks for the reply. The 1099-INT for the savings bond is marked as interest belongs to my spouse only. On the next screen we checked the "We need to adjust the taxable amount." since some of the interest was paid by her mother's estate. On the next screen we entered the adjustment amount and clicked on the "This savings bond interest was previously reported." radio button.
This appears to be a bug in the Virginia handling of this situation on the "Worksheet for Spouse Tax Adjustment". I belive that for line 7.b , "Income from obligations or securities of the United States" the adjusted taxable amount should appear under my spouse and a zero should appear for the taxpayer. Currently the full bond amount shows for my spouse and the adjustment amount appears as a negative value for the taxpayer.
