Accrued Market Discount is a "gain." But it is not the same as a "Capital" gain. They are two different things and treated differently on a federal return. When you sell a Treasury Note or Bond, that was purchased on the secondary market, prior to maturity, there may be both an accrued market discount and a capital gain. The AMD will be treated as interest on the federal return and the capital gain will be treated as a capital gain. Two different things.
But again sticking to the question which for me is about state taxes because I already know how federal taxes are properly handled:
Is the AMD reported in box 1f of 1099-B exempt from state taxes in:
A) No states?
B) All states?
Or C) Some states and if so which ones?
That is the question here and in spite of pages and pages of posts I find on the Net on this topic, some of the posts on threads I started myself I have seen no definitive authoritative answer to this question. It is as elusive as unicorns.
There is an answer, but we need to find someone who knows it and doesn't just "think" they know it.
Then the question of how to enter it in TT is a secondary question. I believe that should be simple once we know the answer.
