Now, we know more!
Let's confirm that you did:
- Enter the 1099-OID following the steps above,
- you did adjust the amount in box 10 to be the same as the amount in box 2.
- The excess goes on Schedule A, line 16, other expense, but since you are using the standard deduction, you will not see a decrease in tax liability.
Instead, you can skip the step to enter the excess since you are not itemizing and that should solve your problem.
For more information, see pub 550
- It will be reported correctly
- You will have to pay the extra $10 in taxes.
- There will not be any negative interest on the Schedule B.
[Edited 02/21/20 | 7:45pm PST]
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