I get a combined statement from my broker with both a1099INT and a 1099OID. The broker reports the coupon interest and amortized bond premium on 1099INT, and the inflation portion of the TIP as OID on 1099OID, with no bond premium shown there. Input in this way on TurboTax gets a ding from the program asserting bond premium is larger than Line 3 interest in SmartCheck. So I tried putting the bond premium on the appropriate line on the 1099OID instead, still get the same ding. However, if I zero out the bond premium on both forms and instead list it as acquisition premium on the OID it seems to work. Give the same result on Schedule B with the correct interest totals and an ABP deduction. My point is that I understand how the IRS may say you can't deduct a bond premium greater than interest earned on a normal bond, with a TIP the bond premium will almost always be much larger than the coupon, which is often only .125%. The real interest is the OID. TurboTax should allow the bond premium deduction as long as it is less then THE SUM OF interest plus OID. This would conform to IRS Bulletin 2013-12 Section 1.1275-7, which shows an example calculation.
