US Treasury Bill Interest - 1099-B vs 1099-OID vs 1099-INT

[x9redhill]

Had a short-term US Treasury Bill that I held through maturity and resulted in $478 interest.

The Treasury Bill is listed on 1099-B as a short-term transaction "for which the basis is not reported to the IRS".  The cost basis is shown as the same as the proceeds (amount received at maturity) and the Gain / Loss is reported as $0.

The Treasury Bill is also listed on 1099-OID with the $478 reported as the Original Issue Discount.

From looking at other answers in the TurboTax community, it looks like this interest should actually be reported on my 1099-INT so that I can then mark it as interest on US Treasury obligations and hence would not be taxed at the state level (in my case, Colorado).

Is this correct way to handle this?  That means I'll remove the 1099-B US Treasury entry that automatically came through when transactions were downloaded by TurboTax.  And I'd then manually create a 1099-INT entry in TurboTax.

[DianeW777]

No, that is not the correct way. The 1099-OID is reported under and the amount should be listed in Box 8 which should exempt it from your state return. This will still show up on your federal return as it should. If it is not in Box 8, you can list it there. This will exempt it from your state return.

1. Open your TurboTax return
2. Search (upper right) > type 1099oid > Open the FAQ (TurboTax Online) > Click 1099-oid original issue discount > TurboTax Desktop click the Jump to... link

The 1099-B should not be skipped.  You would enter it with a sales/redemption price equal to the cost basis.  The interest you included in your taxable income becomes part of your cost basis for the redemption.

[x9redhill]

Thanks for the reply.

I did locate the 1099-OID and was able to get the $478 interest exempt from my Colorado return.

As I previously mentioned, the Treasury Bill is listed on 1099-B as a short-term transaction "for which the basis is not reported to the IRS".  On the 1099-B, the cost basis is shown as equal to the proceeds ($75,000 redemption amount) - not the other way around as you stated in your response, in which case both would show $74,522.  Are you telling me I should override these values on the 1099-B in TurboTax?

[DianeW777]

No, do not override.  The 1099-B shows the cost and selling price as the same which should be the accurate zero gain or loss for this redemption.

@x9redhill