Treasury Note tax reporting

[pr-2024]

I searched for existing questions on tax reporting for Treasury Notes, and while there are several, they don't quite match my observations so starting a new post.

I purchased a US Treasury Note from secondary market and held it to maturity for a little over one year. The Note matured in tax year 2023. The Note was purchased at a discount from the Par value and it also generated interest in six monthly coupons.

I am using TurboTax Premier, Desktop (Windows) version. TT was able to download the tax info from my broker's website. The imported 1099-INT correctly shows the interest income through the coupons. TT also reports a line item imported for 1099-B as a "Long term basis reported to IRS" for the maturing of the Note. The numbers are imported correctly, with the Box 1d showing the Proceeds and Box 1e showing the Cost basis. Both of these numbers are same so that the net gain is reported as zero. But there is also a number in Box 1f (about $3750) and labeled as "Market Discount" on my brokers tax documents. I have entered it in the Box 1f on the TT form for the line-item. The help hyperlink labeled as "Learn more" says that TT will add this amount as Accrued Interest on Schedule B. But, when I look at the Schedule B in the Forms section, I don't see this market discount number reported anywhere. It is not on the Schedule B, nor is it in the Worksheets for the broker. It looks like this Market Discount is not being taken into account towards calculation of the taxes.

Why is the Market Discount not showing up on Schedule B as indicated by the "Learn more" help link? Is this a software bug? I called the TT help desk, but the first line of support were not able to answer my question. The issue is still unanswered. Any suggestions?

[Mike9241]

You received a Form 1099-B (or substitute statement) showing accrued market discount

did you use step by step mode to enter the information? import does work for this item (adjustment code D)

in step mode, you check the box that asks if you have more info to enter that I don't see here". then there's a box for accrued market discount. also click on the "learn more" link

when done the AMD will be included in interest income. 

[pr-2024]

Yes, I used the "Step by Step" mode, and the import did work as you describe. I see the Market Discount in the box 1f in that mode. But, when I switch to Forms mode and go to Schedule B, that market discount number is no where on it. Why? According to the help link "Learn more" it should have been on the Schedule B. That is the issue.

[CatinaT1]

Are you still experiencing this problem?

Make sure you have ran all updates. 

If using TurboTax Online: Clear your cache and cookies. See this FAQ, for your particular browser.

If using TurboTax Desktop: Please see this FAQ.

If you still are not able to solve this, please call TurboTax Customer service.  Here is a link:  Turbo Tax Customer Service 

[pr-2024]

Yes, the problem is still there.

I am using TurboTax Premier version for Desktop. The product is activate and I have checked and applied the Updates - multiple times.

I did call the Support desk. Here is my Case # [phone number removed]. The support folks explained that they are the first line of support and the issue I am describing is not within their expertise. They asked me to speak with a TT Attorney, instead. I did speak with the Attorney as well, but he didn't answer my question; instead, he kept saying everything looks good and not to worry. I finally gave up.

I think the issue is a software bug, but I am not clear how to reach out to the technical support. Can you point me to the technical support number?

Meanwhile, I have tried several experiments, none of which have helped. For example, I deleted the imported record, and then manually entered the same information. No change occurred in the Forms. I have looked at these forms: Schedule B, Schedule D, and form 8949. I don't see the number from Box 1f showing up anywhere.

[fanfare]

Since you held the note less than two years,

Enter the total accrued market discount yourself on Schedule B using 1099-INT.

@pr-2024