1099-INT Bond Premium Amount for Tax Deduction

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mslaw
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1099-INT Bond Premium Amount for Tax Deduction

Post by mslaw » Mon Apr 16, 2018 11:25 am

If you receive a 1099-INT with a Bond Premium Adjustment, Box 11 or 12, is this the amortized amount only for the year in question and therefore all deductible for the year on the 1099-INT?

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HueyLD
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Re: 1099-INT Bond Premium Amount for Tax Deduction

Post by HueyLD » Mon Apr 16, 2018 12:48 pm

It is not a deduction. Rather, it reduces the reported interest income on 1099-INT.

mslaw
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Re: 1099-INT Bond Premium Amount for Tax Deduction

Post by mslaw » Mon Apr 16, 2018 4:26 pm

Thank you, yes of course an adjustment that reduces the interest total. If I see the ABP adjustment on 1099 INT would you assume it is the correct amortized amount for the year, 2015 and later?

Longdog
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Re: 1099-INT Bond Premium Amount for Tax Deduction

Post by Longdog » Mon Apr 16, 2018 4:30 pm

It is for the current year. And only for covered bonds.
Steve

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HueyLD
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Re: 1099-INT Bond Premium Amount for Tax Deduction

Post by HueyLD » Mon Apr 16, 2018 4:48 pm

mslaw wrote:
Mon Apr 16, 2018 4:26 pm
Thank you, yes of course an adjustment that reduces the interest total. If I see the ABP adjustment on 1099 INT would you assume it is the correct amortized amount for the year, 2015 and later?
The 1099-INT is for one year only.

I assume yours says year 2017. Do keep in mind that some brokerage (such as Fidelity) reports the ABP for both covered and noncovered bonds. The ABP for covered bonds should be shown on the actual 1099-INT. And you will have to dig into the supplemental section to find the ABP from noncovered bonds.

Add the ABP for both covered and noncovered bonds to come up with the total ABP.

mslaw
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Re: 1099-INT Bond Premium Amount for Tax Deduction

Post by mslaw » Mon Apr 16, 2018 5:18 pm

Thank you both, excellent answers.

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