I have a 1099-B showing a $12,000 accrued market discount for a treasury note that was redeemed in 2024. Coupon interest is on my 1099-INT of this year and of 2023, so this seems to be fine.
I entered this in Turbotax under the short-term sales category, where it is on the 1099-B.
I understand that the IRS treats this 'gain' as interest, but I am not clear how to get Turbotax handle it this way: should I check the box "I need to adjust my total tax basis"?
If so, should I then check the box D (accrued market discount) and enter "total adjustments" of $12,000 or -$12,000? If I enter -$12,000 it seems result in no extra federal tax; if I enter $12,000 it seems to result in double federal tax.
If I put $0 adjustment, it seems result in the correct federal tax, but it shows as a capital gain, not interest.
(I am in NY, so I understand I would have to correct the state section separately to avoid being taxed there)
What is the best way to enter this in Turbotax?
