Turbo Tax removes 1099B w/box A checked from short term capital gains as well as 1099 w/Box D checked from long term capital gains on mature Treasury Notes (and Bonds I presume) on form 8949 column g from total short and long term cap gains using code D) It then lists all these gains as 1040 Schedule B interest in order to make all proceeds from US Treasury Notes (interest + cap gains) fully taxable as ordinary interest income (and not tax preferred cap gains levels) at the federal tax level.
No matter what state one lives in, this interest is NOT taxable at the state level by federal law. If the federal government taxes cap gains as interest on Treasury Notes they cannot be taxed again at the state level. Turbo tax needs to provide us a method of removing this federal interest currently blindly copied over to the state tax interest documents.
Who can I discuss this with at Turbo Tax.
