As @MarilynG1 states TurboTax will use the amount of Accrued Market Discount entered in box 1f to increase cost basis on the sale and put a corresponding amount of interest on Schedule B as ordinary interest.
For US Treasury Obligations, instead of putting the Accrued Market Discount in box 1f, use the cost basis adjustment box when entering the 1099B information to enter the amount for the bond sale. Then make a 1099-Int entry in "Investments" for the brokerage and put the corresponding amount in box 3 for US Treasury Obligations.
If your state does not tax those US obligations then the amount from box 3 will show as a deduction from federal AGI on the state forms automatically.
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