Sorry Mike, I'm not sure I completely get what you are saying. The 1099-INT would be reported to the IRS, which is why I wasn't sure how I could get around not reporting it.
I understand that reporting more income than on the various standard income forms is possible and would not raise any issue with the IRS. I'm asking for the exact opposite, I have rental interest income that would be reported to the IRS but I want it to be applied against a rental loss.
You got me thinking, I'm kind of viewing this the same as having a brokerage account where you might have cash in an interest bearing account. That interest would be documented via a 1099-INT but it can't be used against any losses incurred in the brokerage account.
FYI, I don't know how I gained so much interest, but it is in the several hundred dollar range. The only thing I can think of is that I refinanced near the end of 2020 and the company that was handling the loan was very slow in turning the paperwork around. So it is possible a large portion of the funds were being held up and bearing interest (I paid down the loan at the same time). But that means the company managing the loan and the final escrow for taxes were in the same escrow account. It really doesn't matter, I just have a somewhat large and unexpected 1099-INT gain that was generated by the escrow account.
Also, I found a legal site that seemed to indicate it was possible under certain instances to claim gains/losses in an escrow account but it was too complex for me and would take more time that I wan't to spend to decipher it.
I was hopeful others may have run into a similar situation and found ways to handle it within TT.
