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Level 1
posted Jun 4, 2019 1:50:00 PM

How do I enter less interest for US Savings Bonds reported on a 1099-INT?

I inherited some US Savings Bonds. The tax on the interest earned as of the date of death was paid as part of the estate tax. The bonds matured this year and I cashed them in. The 1099-INT has the total interest earned. I am going to enter only the interest earned after the date of death. What other documentation do I need to include as support?


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1 Best answer
Expert Alumni
Jun 4, 2019 1:50:01 PM

That can be handled very easy in TurboTax. While you are signed into your TurboTax account you can use these steps.

  • Select the Federal tab in the black navigation panel on the left
  • In the search box, upper right, type 1099int > Jump to 1099int
  • Add another interest income or Start/Update
  • Choose to type it yourself
  • Click that your 1099int has more boxes
  • Enter the savings bond interest in Box 3
  • Continue to the screen where you can select "We need to adjust the taxable amount"
  • Enter as a negative the amount to remove from your taxable income
  • Click the images to enlarge and view for assistance.

2 Replies
Expert Alumni
Jun 4, 2019 1:50:01 PM

That can be handled very easy in TurboTax. While you are signed into your TurboTax account you can use these steps.

  • Select the Federal tab in the black navigation panel on the left
  • In the search box, upper right, type 1099int > Jump to 1099int
  • Add another interest income or Start/Update
  • Choose to type it yourself
  • Click that your 1099int has more boxes
  • Enter the savings bond interest in Box 3
  • Continue to the screen where you can select "We need to adjust the taxable amount"
  • Enter as a negative the amount to remove from your taxable income
  • Click the images to enlarge and view for assistance.

New Member
Jun 4, 2019 1:50:03 PM

This works fine for the federal return. For the state return, where interest from savings bonds is not taxable, TT imports the "Box 3" value instead of the "adjusted taxable amount" value. This results in a much larger reduction in state taxable income than is correct.
Is there a way to correct this in the state return?