I inherited a savings bond from my Mother who passed away in 2019. I cashed it out in 2022 and received a 1099-INT from the treasury for the interest.
On my Mom’s last tax return for 2019 I listed the interest that had accrued up to the date of her death and paid the taxes due on that. I listed the bond numbers detail and interest on schedule B of that return.
In 2022 Turbo tax Premier I entered the Treasury 1099-INT for $3147 with an adjustment of $2540 for the accrued interest she had already paid the tax on earlier. I put the adjustment in the questions subsequent to entering the 1099-INT when it asks the question about it. I assumed that this adjustment was exactly what that question was for, but it seems to do nothing at all to reduce the taxable amount. Form 1040 line 2b still lists $3147 as taxable interest, which is incorrect.
What am I doing wrong, or does Turbo Tax have a calculation problem?
The adjustment for previously taxed U.S. Savings Bond interest does work in TurboTax.
Did you enter interest in Box 3 – Savings bonds and treasury int?
On the screen "Let’s get your 1099-INT or brokerage statement details" you will see a check box for My form has info in more than just box 1 (this is uncommon).
Check that box to enter an amount in Box 3
If you’re the beneficiary of a savings bond where a portion of the accrued interest was previously reported as income, an adjustment to the savings bond interest reported on the 1099-INT to reflect only your taxable portion. Here's how:
I'm sorry to report that your solution does not work. Can't quite follow your prompts exactly as they do not correspond to those on my version of TT. However, I did enter the "adjustment" but it doesn't affect the 1040 line that it should, which is unaffected by the previously reported amount. The 1040 interest on line 2b should be $3147 less $2540 = $670. It's not, the adjustment I entered has no effect.
The adjustment for previously taxed U.S. Savings Bond interest does work in TurboTax.
Did you enter interest in Box 3 – Savings bonds and treasury int?
On the screen "Let’s get your 1099-INT or brokerage statement details" you will see a check box for My form has info in more than just box 1 (this is uncommon).
Check that box to enter an amount in Box 3
That's it! Due to the non standard format of the Department of the Treasury 1099-INT I didn't notice that the interest was labeled "Box 3" and not the usual Box 1. Why that is I don't know, but now the adjustment reduces the taxable amount as expected. Thanks for clearing this up!