topic Re: Accrued Interest in State tax filing

Accrued Interest

Spring-Fever — Sun, 01 Mar 2026 20:18:53 GMT

I bought a T-Bill on the secondary market. I had to pay part of the interest that was on my 1099-INT to the seller of the T-Bill in my purchase price. How do I deduct the Accrued Interest that I paid as part of the purchase price?

Re: Accrued Interest

baldietax — Mon, 02 Mar 2026 22:51:26 GMT

T-Bills are discounted instruments there is no accrued interest and nothing to adjust/deduct. Your income in Box 3 should reflect the difference between redemption and purchase prices.

Since you're talking about prices I don't think you mean a Treasury Note with coupons and accrued interest related to a coupon payment in Box 3 .... but if you do then check the "I need to adjust the interest reported on my form" after the 1099 entry screen and follow the on-screen instructions to enter the adjustment.

Note as per the guidance - The adjustment amount entered here will be allocated among the different types of interest reported on this 1099-INT. To apply this adjustment to a specific type of interest, create a separate 1099-INT for each type of interest income, and then enter the adjustment amount applicable to only that type of interest.

Re: Accrued Interest

Spring-Fever — Tue, 03 Mar 2026 15:08:38 GMT

Yeah. It was a 20 year T-bill payable every 6 months bought on the secondary market. Therefore, since I was nearly 2 months into the interest payment cycle, I had to purchase the interest for the time the other person owned it. As you said, I made a separate 1099-INT for the T-bill and checked the needed adjustment for accrued interest. That way I only paid tax on the interest that I earned for the 4 months. Turbo Tax should have been much better with guidance to do exactly what I did. By the way, Google AI correctly gave the answer, then I saw your post. Thanks anyway.