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After you file
Yes, the Market Discount you see on your 1099-B is actually reported as Interest on your tax return.
Market discount is the difference between what you paid for a bond, and the maturity redemption price. If you bought a $1000 bond for $950, your market discount is $50. This discount must be included in your income, as interest, either over the period you own the bond, or when it is sold.
In box 1f your broker is reporting the accrued amount of discount over the time you held the bond. TurboTax will show it as interest income on Sch B, and then subtract the same amount from your gain on the sale (Form 8949), since it's already been reported elsewhere.
Here's detailed info in this Guide to Investment Bonds.
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‎February 11, 2025
8:13 AM