I am looking back over a bond I bought in 2015 for $5,000, redeemed in 2020 for $5,783. I received 1099-OIDs each year, 2015 - 2020. Each year I reported interest income, per these forms. The total over the 6 years is $783. In 2020 I also received a 1099-B for the proceeds when the bond came due. Net proceeds on the 1099-B were $5,783.00. That adds up! OK. But, did I pay income tax on the interest income of $783 over the 6 years, based on the the 1099-OIDs, PLUS income tax on the $783 that I see on my tax return as Long-Term Capital Gains?
I am looking at my pdf, form 8949. Box (d) Proceeds = $5,783. Box (e) Cost = $5,000. Boxes (f) Code from instructions and (g) Amount of Adjustment are blank. Box (h) Gain = $783.
I am reading instruction for form 8949, and it says: "Increase the cost or other basis of a
taxable OID debt instrument by the amount of OID that you have included in gross income for that instrument. See Pub. 550 for details." - I wonder if I was supposed to make an adjustment. I wonder if I paid income tax on $783 twice! I have other bonds coming due, and I do not want to make a mistake(again).
Can you help me understand what I should do next time, when a bond matures and I get a 1099-B?
ADDING TO MY ORIGINAL MESSAGE:
I think I was supposed to adjust/increase the cost basis reported on the 1099-B, so that the Gains ends up zero. I think that I paid too much tax. LTCG rate in 2020 for my income was 15%. $783 x 15% = $117.45 in income tax that I should not have paid. Is there a way to correct for this now on my 2022 tax return?
Thanks.
