Turbotax does not understand ordinary investment income reported on 1099-MISC box 3

[mpmp2]

Pershing/ BNY reports ordinary investment income (coupon payments on their investment notes) on 1099-MISC box 3. After I answer all of TurboTax questions truthfully, it concludes that it is some sort of self-employment income and creates schedule C. 

Why can't TurboTax handle this correctly? It seems a TurboTax bug to me. Reading through IRS publication about 1099-MISC (https://www.irs.gov/pub/irs-pdf/i1099mec.pdf), my interpretation is that the brokerage should be ok to report ordinary investment income (that's not dividends, royalties, stock transactions, interest, etc) on box 3. TurboTax should handle this correctly.

[AmyC]

You need to edit the form and change one answer. If the 1099-MISC is not a business, you have to mark:

• no intent to earn money
• mark that the income is only for this tax year. Otherwise the program will think it is recurring income and a business.
• mark no to like main job

[mpmp2]

But that is not the truth, the intent IS to earn money, just like any other passive investments. TurboTax should fix it so that I don't have to lie to work around their bug, no?

[AmyC]

It is a program toggle, not on any actual tax forms that go to the IRS.

[mpmp2]

So, do you agree that it is a bug with TurboTax? Should it not be reported and fixed? You guarantee accurate returns with maximum refund, and this bug generates a wrong return/ excess tax payments (SE tax) with truthful answers. This is sheer violation of all those guarantees! There may be so many who didn't pay attention to the silently generated Schedule C and the wrongful, excess tax payments. Are you waiting for a class action?