taxnovice15 and hbl3973,
Pub 1212 on page 12 specifically addresses inflation-indexed instruments. Importantly, it states "In general, the premium allocable to a tax year offsets the interest otherwise includible in income for the year. If the premium allocable to the year is more than that interest, the difference generally offsets the OID on the debt instrument for the year. See Regulations section 1.1275-7 for an example."
In reviewing 1.1275-7, for my situation, the section and example that apply is "(2) TIPS issued with more than a de minimis amount of premium—(i) Coupon bond method." This provides the "recipe" for offsetting the OID if the allocable premium is more than the interest.
It seems Turbo Tax is not handling the complexity of TIPS properly and the user must educate themselves and do a work-around if they elect to amortize the premium.
