1. By the definition for the "accrued interest paid," isn't it true that one can't have an accrued interest paid reported, if he/she didn't receive any interest on a bond (let's call it Bond A) in a given tax year? However, I have seen one Form 1099 from a brokerage that reported such a thing. Can you explain under what circumstance this will happen?
2. I will use a made up case to illustrate my question. Supposing a brokerage firm reports the following information in a 1099-INT
Line 1 Interest Income: $20,000 (Note: all are from two types of security: Bank and taxable bond.)
Line 3 Interest on US Treasury security: $10,000
Line 8 Tax-exempt interest: $1,000
This brokerage also reports a $800 on the line of other accrued interest paid in the table of "Distributions and Charges." All of this amount are from either the taxable bonds or Treasury securities.
My question for this case is:
Do I need to create separate 1099-INTs for each type of security such as taxable bond, tax-exempt bond, bank, and treasury securities? What happens if I don't do it and just enter the $800 as the adjustment to this single 1099-INT that is imported directly from the brokerage?
3. How may I create the separate 1099-INTs for each type of security when they are reported by the same firm?