Dear SteamTrain,
Thank You for taking time to respond to my question; but, I still have an issue.
I don't know why accounting for my paid accrued interest shouldn't effect my taxes. Since the seller of these bonds , (which the seller held prior to sale), should be responsible for tax on these coupons because I paid the seller for these interest $ he is entitled to, but the coupons dollars I didn;t receive but show up on my 1009 as income I am responsible for. I should only be required to pay taxes for interest payments, starting when I made the purchase. And this interest should be taxed as income at my marginal tax rate 25%. Thus I would expect TTax to reduce my taxes by (the accrued interest I paid to the seller of the bonds that I purchased from him. multiplied by my marginal tax rate. That reduction in taxes should equal the accrued taxes payed multiplied by my marginal tax rate of 25%. Resulting in a reduction of over $2000. However, TTax only reduced by taxes as if my marginal Tax rate was just 4.4% thus I believe I'm losing over $1500 of monies I should have been refunded. I tried splitting the 1099Int's as you suggested and it had the same effect. Could it be that TTax is not computing properly or that I am doing something wrong?
