Accrued Market Discount at maturity of US Obligation appears as interest on Schedule B. Why is it not showing as exempt on California 540?

[daweitzman]

The US Obligation was purchased at a discount on the secondary market.

[bluepost22]

There is an earlier all-states thread here:

https://ttlc.intuit.com/community/taxes/discussion/accrued-market-discount-on-trea[product key remov...

For Californians here is a way to subtract the Treasury Accrued Market Discount (AMD) from the CA state taxable income using Turbotax Premier 2023.   This mirrors the method my CPA used in 2022.

On Schedule CA, click on Line 8z Column B Other Income, Subtractions. You will get a drilldown with a magnifying glass. Click the mag glass. You will get a worksheet, California Other Income Statement. Enter the Treasury AMD in line 12 column B Other taxable California income, Subtractions. It feeds through properly to sched CA and state taxes drop appropriately.