Where do you deduct accrued interest paid when purchasing a US Treasury bond?

[woodruffmp]

That does not answer the question. Accrued interest paid on the purchase of a bond does not increase its basis. It is an offset to the income received on the bond.

[SteamTrain · Accepted solution]

@woodruffmp 

There is a page after the main form, you need to check the box for:

"I need to adjust the interest.............."

..then on the next page, you can put in the amount and select the accrued interest reason below that.

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A couple of warnings:

1)  If you bought the bond late in the year...and it didn't pay out any interest to YOU during 2025, then you can't declare that accrued interest until your 2026  taxes (when you probably will get some interest)

2) if the 1099-INT you are entering, also has some box 1 and/or box 8 interest in it...then you need to remove all of the box 3 and 12 $$ amounts, and put them into it's own 1099-INT (same Payer) to declare that accrued interest amount.   IF you don't, then the accrued interest deduction will be improperly applied proportionally to the box 1, 3, and box 8 $$ amounts.