Accrued Interest paid on purchase of secondary CD

[ramseyd]

How do you handle the accrued interest that you paid to purchase a CD on the secondary market?  Do I include this cost as part of the cost of the cd (adjusting the capital gains basis)? Or do I adjust down the 1099 Int which shows all the interest payments for the year that include that amount.  Example:  I bought a cd for $1050, including $50 accrued interest. It matured later in the same year and I received the $1000 back plus $200 interest for the year which included the $50 that I had paid.  I only made $150 off the CD. I should not have to pay $200 I never received. 

[Mike9241]

there is an adjustment section for the 1099-int where you will enter the 50 paid so you  are only taxed on 150