percent of us treasuary dividends from mutual fund

[ihateincometax]

A percentage of my dividends from a mutual fund is from us treasury bonds, which should be tax deductible. I used the total of qualified and unqualified dividends multiplied by the percentage to get the dollar amount that is deductible. Where in turbotax do I enter this number because it was not calculated when I downloaded my 1099's from Vanguard. Vanguard downloaded a total summary of all my mutual funds not individual funds. Do I need to delete these entries and enter the individual fund amounts? This is also a problem for the state return.

[ThomasM125]

I assume you mean you uploaded a form 1099-DIV from your broker into TurboTax and it didn't properly reflect your dividend income. The IRS will match the 1099-DIV information with your tax retun and if it doesn't agree they will probably question the entry.

You mention entering individual entries as opposed to a summary entry, that would be fine if the individual entries are reported on 1099-DIV forms. Otherwise, your entries are still not going to match with what is reported to the IRS. 

If your entries don't agree with the 1099-DIV you can still make them, but you should attach a statement to your tax return explaining the discrepancy. Otherwise, you can wait to see if the IRS questions your entries and then you can explain to them your justification for making them.

[ihateincometax]

Thanks for responding to my query. In the mutual fund in question I added the qualified dividends to the non qualified dividends (to get total dividends) and then multiplied by the percentage (36.46%) of US treasury bonds in the fund. Where do I enter this dollar amount? I am guessing that it is added to the amount in box 12 (exempt interest dividends)?! Note: this would not be such a problem if Vanguard had sent me 1099-div statements for each individual mutual fund rather than the summary 1099-div which reflects ALL funds lumped together.

Also you mentioned putting a statement in the return explaining what I did. I file electronically so I don't know how to do that in the TurboTax software.

Thanks for your continuing help.

[SteamTrain]

@ihateincometax 

It has nothing to do with box 12....box 12 is only for Exempt interest from municipal bonds only.

[Additonal Edits]

AND you do not add Ordinary and Qualified dividends together.  You just take the ordinary dividends issued by that particular fund x the percentage (as a decimal of course)

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Edit the 1099-DIV.

On one of the pages AFTER the main form page, there are some checkboxes.

You click one for "A portion of these dividends is US Government interest."

Then on one of the pages that follows, you will enter the proper $$ amount that you calculated was from the US Govt.   No explanation required, but keep a copy of the Vanguard sheets showing the % from US Govt.

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AND...those living in CA, CT and NY cannot claim those $$ at all, unless the fund holds at least 50% of it's holdings in US Govt Securities.  Those that qualify are usually marked somehow as "*" or not "*" in the Brokerage sheets (I'm looking at the Fidelity sheets..i don't know how Vanguard indicates the proper ones for CA,CT, & NY residents)

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[VolvoGirl]

I'm in California and have Vanguard.  I made a spreadsheet to calculate the percentages excluded.  Also this  year Vanguard didn't send the extra backup pages listing the state and percentages.  I had to go to Vanguard online and print them out.  There are 2....US government obligations income information and Tax-exempt interest dividends by state for Vanguard municipal bond funds and Vanguard Tax-Managed Balance Fund.

Here's my sheet, if I'm doing it right.

[SteamTrain]

One has to read the Brokerage sheets closely though.

One of the Fidelity Funds last year (for 2021 - FDRXX)  produced right at 55% of its dividends from US Govt securities

BUT....it was not marked as being CA,CT,NY eligible, because the fund did not actually contain asset holdings over 50%.    100% shouldn't be a problem, but those close to an even 50% +or- 10% of the distribution $$ may need a closer look.

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Fidelity is still working on their 2022 US Govt Distribution % values, so the sheets aren't available yet for this year. 

[ihateincometax]

thanks for taking the time to provide  the additional information. I'm getting there s-l-o-w-l-y.