For the buy and sell in the same year with no coupon payments I'm doing the following unless somebody has a better idea:
Enter box 3. in TurboTax just as it is shown on the 1099-INT. That's the accrued interest received from the sale. Then I select "We need to adjust the taxable amount" from the uncommon situation screen. Then I enter the adjustment amount for the accrued interest paid at time of purchase with "Other reasons" checked off.
This may not be the best way or the right way but that's what I'm doing in the absence of any other info.
