I have the same issue: tax-exempt bond with #s on 1099-OID line 10/11. I ran some tests with TT2020. Entering $$ on 1099-OID:
line 2: increases tax-exempt interest
line 10: reduces tax-exempt interest
line 11: increases tax-exempt interest
None seem to affect tax liability
So, much hunch is that tax-exempt interest on 1099-INT line 8 should instead be entered only on 1099-OID line 2. Then by entering the premium amount on line 10, the net reported tax-exempt interest will be reduced.
I think the reason to do this is so that if the bond is sold, lower reported interest could reduce capital gains. But I am not sure how that would be calculated, or if Turbo Tax retains that information for future use. I don't see how it can since the reported interest is not tied to an individual bond. So it would seem that the OID reported interest must be manually tracked and used to adjust the basis when the bond is sold.
Note: I am not a tax professional and this is only experimental reporting. Hopefully a qualified representative can respond and advise.
