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Redemption of T-Bill-  What adjustments are needed?

Purchased a $37,000 T-Bill (US TREASU NT 0.125%09/23UST NOTE DUE 09/15/23) on 6/27/22 for $35,763.00.  It paid interest of $23.13 on 9/15/22, 6/15/23, and 9/15/23.  It matured and paid $37,000 on 9/15/23. 

 

The 2022 1099 Consolidated statement from Schwab showed 23.13 interest paid and $13 in Accrued Interest paid (which I deducted from 23.13 on my 2022 return).

 

The 2023 1099 Consolidated Statement from Schwab shows the interest paid of 46.16 on the 1099-INT (March and September).  On the 1099B (long term covered) it shows Proceeds (box 1d) of $37,000, Basis (box 1e), and Accrued Market Discount (box 1f) of $1,237.  Which nets out to $0 Realized Capital Loss.    There is a section on the 1099 (Info not provided to IRS) called Amortization and Accretion for Fixed Income and it shows a “Market Discount Year to-Date” (and “Market Discount Life to-Date”) of $1,237. 

Where do I make the adjustment so that the Turbo tax computes the tax  on the $1,237? (I assume at ordinary rates)   

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1 Best answer

Accepted Solutions
ThomasM125
Expert Alumni

Redemption of T-Bill-  What adjustments are needed?

When you enter the Form 1099-B in the Investment Income section of TurboTax, you need to enter the cost basis as $35,763 and the accrued market discount as $1,237. The proceeds are entered as $37,000.  The accrued interest will then be entered as interest income on your Form 1040, line 2(b). You will see an option on the screen where you enter the proceeds and cost basis that says I have other boxes on my 1099-B.  You need to click on that box to see the option to enter your accrued interest.

 

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1 Reply
ThomasM125
Expert Alumni

Redemption of T-Bill-  What adjustments are needed?

When you enter the Form 1099-B in the Investment Income section of TurboTax, you need to enter the cost basis as $35,763 and the accrued market discount as $1,237. The proceeds are entered as $37,000.  The accrued interest will then be entered as interest income on your Form 1040, line 2(b). You will see an option on the screen where you enter the proceeds and cost basis that says I have other boxes on my 1099-B.  You need to click on that box to see the option to enter your accrued interest.

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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