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Level 1
posted Mar 28, 2022 11:12:47 AM

difference between 1099-oid provided by a broker and turbo tax smart check

Question - Smart check says that the bond premium adjustment in box 10 is greater than the interest income reported in box 2 and I must reduce the bond premium amount reported.   But the broker's 1099-OID does not even have a box 2.  This is for a state tax free bond.   Nonetheless, it seems to me that a bond could have been purchased at a premium, but no interest was paid.

 

Please advise.

 

Thank you,

Barry

0 1 116
1 Replies
Expert Alumni
Mar 28, 2022 1:27:21 PM

Yes, that is correct, the bond premium can't be more than the taxable interest income. The reason is that the bond premium reduces the taxable interest.

 

"You must reduce the bond premium amount to no more than the amount in Box 2, and report any excess on Schedule A subject to limitations."

 

This means that if Box 2 is $0, Box 10 must also be $0. You can deduct the amount in Box 10 on Schedule A:

  1. Click on Federal Taxes, then Deductions and Credits.
  2. Scroll down to Other Deductions and Credits, expand the section.
  3. Click Start to the right of Other Deductible Expenses.
  4. Answer the next two questions No.
  5. Answer Yes to Did you have any of these other expenses?
  6. Enter the amount next to Amortizable bond premiums.