My problem is that I need to report this amount as 1099-DIVIDENT . Not 1099-Interest.
The amount that needed to report is DIVIDENT (from Vanguard US inflation protected security fund). I entered the amount in box 1, then click 'a portion of the interest is US gorvernment', then enter the amount in box 1 in the next screen as US gorvernment interested.
I test by reporting this amount as US interest in box 3 of form 1099-INT. I worked. Turbotax upload this amount to tax form CA(540) in the subtraction. This resulted in more than $200 increase in my CA tax refund. However, I worry that if I reported the amount in form 1099-INT, the total dividends in my tax report would be less than the amount reported to IRS; this may get me in trouble.
