Entering tax-exempt California municipal bond 1099-INT data in TurboTax

[mcampbellcrockett]

I purchased seven tax-exempt California municipal bonds in 2019. I received a consolidated 1099 from my broker that includes a 1099-INT that reports the total of all tax-exempt interest in Box 8 and the total of all tax-exempt bond premiums in Box 13. In Box 14--Tax-exempt bond CUSIP number--it has "See detail".

TurboTax seems to indicate that I need to create a "fake 1099-INT" for each tax-exempt bond to record the tax-exempt interest received, the bond premium paid, and record the bonds CUSIP and any adjustment for tax-exempt interest paid when the bond was purchased. For each "fake 1099-INT" Box 8 and Box 13 in the original 1099-INT would need to be adjusted.

I am a California resident and want to ensure that data entered into the TurboTax Federal return flows correctly into the TurboTax California return.

[JulieS]

I don't see any reason that you can't enter the totals from your 1099-INT. The instructions say that you can enter "Various" in box 14 if you have more than one CUSIP number. 

[mcampbellcrockett]

The problem that I have with leaving Box 14 blank or entering Various is that TurboTax reports my tax-exempt interest income as $1833.33.  I didn't actually receive that amount as I had to pay $1485.84 in accrued interest when I purchased the bonds.

I just went through the entry process again and noticed that the adjustments only apply to taxable interest.  This seems odd as tax-exempt interest impacts the calculation of how much of your Social Security income is taxable income.

I raised my question because I was attempting to reduce my tax-exempt interest by entering an adjustment for the accrued interest that I had paid when I acquired the bonds.   Not allowing adjustments to tax-exempt interest strikes me as an error in TurboTax' logic.