Hello. I have Accrued Market Discount Interest on Treasury Notes held for over a year. This is treated as taxable Interest for Federal tax purposes. Virginia allows a Subtraction from AGI for government interest and dividends however TurboTax is not carrying the interest over to the Virginia Form 760 as a subtraction. Help appreciated.
ChrisG0621
Did you enter it in box 3 on the 1099INT? Not box 1. You have to click the little box for my form has more boxes to get to box 3.
Thank you VolvoGirl. The accrued interest is reported on a 1099-B and therefore is entered in the Stock, Mutual Fund, Bond section of TurboTax, with the interest entered as an "adjustment". The gain is not shown as a long-term capital gain but instead is posted as ordinary interest on the 1040. Thanks for your help. Chris
As follow-up on my original question, I received an answer from TurboTax Support. On the first page that loads in the State Return, titled "Here's the income that Virginia handles differently" there is a line item called "Other Subtractions from Federal Income" where the accrued interest can be entered. Problem solved, and this issue is closed.