@phraxos
Correct on all counts. TTX desperately needs to make some software improvements to be able to delineate, on the follow-up page, after the main 1099-INT form, exactly which type of interest the accrued interest you paid out is being referred to.
Thus, if you paid any accrued interest to the seller of any type of bond (corporate, or US treas, or Muni), currently the only way the software can handle it properly is for you to create a separate 1099-INT, as-if coming from that issuer that contains only the box 1, or3, or 8 $$, along with declaring the accrued interest you paid for that particular bond type. (note also that the boxes 1&11 or 3&12, or 8&13 must also go together on the separate 1099-INT when this is needed).
Thus, since I buy Muni bonds most every year, I always have to remove all of the box 8,13 values from the brokerage's 1099-INT, and transfer into a separate 1099-INT and report the accrued interest I paid out on any Muni's I bought.
AND ALSO, if you are living in a state with income taxes, and you want to declare bond interest from your state's Muni's, so that they don't get taxed by your state...then you might even need to break up the box 8, 13 & accrued interest, into the $$ relative to your state, and $$ from all other states, into two separate 1099-INT forms (I usually don't bother with this, since I get so little from my own state's bonds, that it's not worth the effort)
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
