You do not lose the amortized premiums. Select the correct reason for the adjustment of your interest. The adjustment will reduce your amount of reportable tax-exempt interest on Form 1040, line 8b. For taxable bonds, the adjustment will reflect on Schedule B, Part 1. Any excess can be used as an itemized deduction under Miscellaneous Deductions, line 16, if you use them.
The deduction is limited to the amount by which your total interest inclusions on the bond in prior accrual periods is more than your total bond premium deductions on the bond in prior periods. Any amount you cannot deduct because of this limit can be carried forward to the next accrual period. If this is your situation keep your records to record the amount later that you were unable to use in 2022.
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