I use the forms view exclusively. I have a few transactions (mostly treasury notes) where the 1099-B has an adjustment for "Accrued market discount". My understanding is that the amount of Discount should lower my capital gain, and increase my Interest income. In other words it's shuttled out of the Schedule D and into the Schedule B.
When I enter the Discount in the capital asset sales worksheet in Forms View, it actually increases my capital gain by the amount of the Discount instead of decreasing it. There is no entry on schedule B. As such, I am picking up 2x the income.
I tried testing this with a simple dummy transaction of a sale with $1,000 in proceeds and $0 in cost basis. Then I entered an Accrued Market Discount adjustment (Code D). I would expect the capital gain to be 0 and the interest income to be $1,000. Instead, I get a capital gain of $2000.
Then....I deleted the dummy transaction and switched to Step By Step mode and re-entered the transaction and it handled as expected - Capital Gain of $0 and an entry for "Accrued market interest" in Schedule B for $1,000.
Why is this happening?
Thx!!!
