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numnuts
Level 1

1099-B has long term capital gains marked under column 1f and if entered it that way they show up as interest income, WHY?

1099-B  When entering long term capital gains on tax exempt bonds into form 1041, the gains are listed under column 1f and when I enter it there, it becomes interest income on the 1041, not long term capital gains.

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tagteam
Level 15

1099-B has long term capital gains marked under column 1f and if entered it that way they show up as interest income, WHY?

"... it becomes interest income on the 1041..."

That would be the correct treatment if you had not been accruing the discount over the period of ownership of the bonds.

See https://www.irs.gov/publications/p550#en_US_2016_publink10009981

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tagteam
Level 15

1099-B has long term capital gains marked under column 1f and if entered it that way they show up as interest income, WHY?

"... it becomes interest income on the 1041..."

That would be the correct treatment if you had not been accruing the discount over the period of ownership of the bonds.

See https://www.irs.gov/publications/p550#en_US_2016_publink10009981

View solution in original post

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