I have income from several Treasury Inflation Protected Securities. All purchased at a bond premium. All with very low coupons. So my 1099INT Line 3 interest is much less than my Line 11 bond premium. However the OID (inflation portion) is much larger than the bond premium. Will TurboTax allow the bond premium deduction in full? Lets do an example. Say the Line 3 Interest is $1000, the Line 11 bond premium is $5000 and the OID is $10,000. How can I plug this into TurboTax to have the interest net out to +$1000-$5000+$10000 = $6000 which should be the federal taxable amount? Also will the net interest carry over to state taxes so nothing will show up as taxable there?
