Accrued Market Discount reporting when 1099-B cost basis equal proceeds

[dina_sm]

I had a Treasury bond matured in 2024 and got the 1099-B for this with AMD reported in box 1f, but cost basis and proceeds are the same (1d = 1b), so TurboTax doesn't do anything and doesn't add tax for the AMD. How should I fix it?

[baldietax]

it might be correct and nothing to adjust and you paid the interest ready via a different 1099 so check that first at cusip level before doing anything.  what sort of bond was it, what's the cusip (9 digits starting 91282 etc) ...

check for:

most likely - interest was reported already on 1099-INT Box 3 for a T-Bill?  I think some brokers just report 1099-INT Box 3 and nothing on 1099-B, others show the T-Bill maturity proceeds on 1099-B

or did you have 1099-OID reporting the accretion, in which case the cost basis would have been adjusted and you paid the interest thru 1099-OID (e.g. Treasury Strips).

your brokerage statement may contain other info "not reported to the IRS" to show the cost basis adjustment.

[dina_sm]

This 1099-B is for T-Note that I held less than a year to maturity. AMD is reported on 1099-B and nowhere else (I checked all the detail statements). There is no 1099-OID and I'm not clear why cost basis = proceeds on this 1099-B.

[baldietax]

how much was the $ discount and the original cost price?

[dina_sm]

I know that I paid $98.12 per note, thus the AMD. I don't know the original cost, since I bought it on the secondary market (if that's what you're asking). Does it matter? CUSIP is 912828YE4. 

[baldietax]

ok I was wondering if it was falling into some deminimus rule and the cost basis being adjusted to par, but it's too much AMD for that.  By original cost I just meant your cost in the secondary market but the price is enough info.  I had Notes with similar holding period at Merrill reported as short term on 1099-B with my original cost and AMD.  Can't think of a reason for the cost to be reported at par if it's not reported elsewhere, suggest asking the tax reporting people at your brokerage to explain it.

If it's incorrect I suppose the fix is to change the cost basis on the 1099-B to the correct amount.

btw are you aware of the state tax issue in TT, that AMD posted to Schedule B from 1099-B adjustments do not flow to state taxes as a subtraction/exemption (there is nowhere to indicate the AMD is from a Treasury).  There is some ambiguity on state exemption for this type of income depending on state tax code, but TT doesn't support it either way.  If it's exempt in your state (can't advise) the only solution I've seen in the many threads on this topic is to make a miscellaneous/additional subtraction to state tax which in some states has precluded e-file (NY I think).

Not a CPA/Expert so not sure all the implications of the above and maybe others will weigh in, but hope this helped.

[dina_sm]

Ok, thank you. I've already opened a case with the broker (Chase). I also had some T-notes at ETrade and its1099-B has the correct/expected cost basis.

I'm aware that TT doesn't handle the state adjustments, but based on everything I read, AMD for treasuries is taxable in CA where I'm. Need to dig a little more on that.

[Ryan86]

Hello, I am having the exact same issue, did you ever get a response from JPM? Thanks!