Amortizing the premium paid on Treasury note in 2024

[tb_2019]

Dear Kitty,

I purchased a 10-year T Note in early 2024 with a premium on Vanguard secondary market. In the 1099 int form I received, Vanguard included the bond premium covered lots. Treasury note interest is taxable for federal income tax, but is exempted from state and local income tax. (And we don't pay state and local income tax anyway since we live in Texas.) Hence I am not sure whether we must amortize the premium I paid annually? (It it true that tax exempt bond must be amortized every year?) Or can I deduct the premium when the bond matures in 10 years or when I sell it later?

If I have to amortize this premium, do I also have to amortize the discounts on the rest T notes and T bonds we purchased/own as well then?

Thank you for your help

[RobertB4444]

You can elect to amortize the premium on the bond or not at the time of purchase.  If you choose not to amortize it you are responsible for tracking the bond premiums to use at the time of sale.  Also, you can't go back and forth.  Either you amortize it or you don't.

Bond premiums for non-taxable interest must be amortized.  

@tb_2019