Nj State Deduction On Federal Farms Bank Bond Capital Gains

[apergoli]

My Federal Farms bonds either matured or were called resulting in a small capital gain.  It is my understanding that capital gains from these bonds are NJ Tax free (in addition to the interest).  How do I force these sales to not count on my NJ income tax?  Last year a list appeared and I was able to check a box on all that applied.

[apergoli]

My origianl message indicated that these were capital gains.  They are actually considered Accured Market Discounts.  These are federally considered taxable interest but they are NJ Tax free.  How do I make TurboTax treat this a state tax free?

[RobertB4444]

You start by entering your 1099-INT into the system just as it was issued to you.  Then, after you have entered the 1099-INT, there is a screen that says "Do any of these uncommon situations apply?" and you will check the box that says "I need to adjust the interest reported on my form".  That will give you a box to enter the amount and a drop down menu to select 'Accrued Market Discount'.  That should take care of it for you.

[apergoli]

Thanks for your response....My Desktop version of Turbotax Deluxe doesn't have that last drop down explicitly highlighting Accrued Market Discount...You are correct that it can be adjusted there though.  I chose to use the check boxes in the Forms view to ID exactly which ones applied.  Thanks again...