Bond Premium Amortization Box 11 Form 1099-INT

[caroleiaap]

When I follow TT prompts and enter the amount from Box 11 on 1099-INT for Bond Premiums, it deducts the entire amount on Schedule B, Part 1 with the words APB Adjustment.   What I don't understand is if I elect to amortize, what do I need to do differently in TurboTax, and how do I calculate the amortization? 

[Mike9241]

under the tax laws the default is to amortize any premium over the life of the security. so that is the amortization not the full bond premium. see

from 1099-INT

Box 11. For a taxable covered security (other than a U.S. Treasury
obligation), shows the amount of premium amortization allocable to
the interest payment(s), unless you notified the payer in writing in
accordance with Regulations section 1.6045-1(n)(5) that you did not
want to amortize bond premium under section 171. If an amount is
reported in this box, see the Instructions for Schedule B (Form 1040)
to determine the net amount of interest includible in income on Form
1040 or 1040-SR with respect to the security. If an amount is not
reported in this box for a taxable covered security acquired at a
premium and the payer is reporting premium amortization, the payer
has reported a net amount of interest in box 1. If the amount in box 11
is greater than the amount of interest paid on the covered security,
see Regulations section 1.171-2(a)(4).

[caroleiaap]

Is the amount that was reported to me in Box 11 - the already amortized amount? Or do i need to adjust that amount?

[SteamTrain · Accepted solution]

Yeah, you don't put in the whole premium you paid for a bond in box 11....but your brokerage should be putting the proper amount in there for you on the 1099-INT they issue.  (I guess in a rare instance, it could be the whole amount if you buy one that matures, or is called in the same tax year).

...thus...every year, my Fidelity 1099-INT shows a value in box 11 every year for the APB related to the one bond I have that issues some $$ into box 1.   And it is just the amortized amount.  (easy to see since I only have one bond with ABP) .  and that amount also fairly closely agrees with the change (reduction) in Basis every year for that bond.

I do have more $$ in box 13, that relates to the ABP for my Muni bond $$ in box 8, and that amount also fairly closely agrees with the change in Basis every year for all my Muni's that I hold.