Hello, I called Fidelity and they told me that since the note was not zero coupon but had a stated accrued interest, it was purchased at a discount and should be reported as a short term capital gain. The problem in a nutshell is that if it was reported as treasury income there would be no tax to the state of Maryland. I could change the turbotax from capital gain to interest income but not sure if that is the way to handle this??
