This answer is only for TurboTax Business (not Home & Business).
- Enter the 1099-INT information as you normally would (except for the data in Box 13) and select CONTINUE.
- Answer the question about Special Private Activity Bond Interest (yes or no).
- Select ADD MORE INTEREST INCOME and new 1099 INT entry fields appear.
- (Do NOT reenter the 1099 fields from step 1). Look through your 1099 Composite forms from your broker to determine whether the premium was from a taxable bond or tax-exempt bond. Look for the words “Bond Premium” on the statement.
- If the premium is from a taxable bond then enter as a negative enter in Box 1. If from a tax-exempt bond then enter as a negative figure in Box 8.
NOTE: This reduces the amount of interest that was earned as a result of the premium that was paid when you purchased the bond.
