Pub 550 explains how to make the adjustment on Sch B (see last paragraph on pg 26 in 2023 edition). Sycamore's Aug 23 post covers how to make this adjustment in TurboTax:
No one commented on this so I assume it's correct (I don't use tax software). A related discussion on Intuit's forum similarly describes this adjustment (although the discussion gets sidetracked into savings bond interest): Where do i enter the accrued interest paid on bonds?sycamore wrote: Fri Aug 23, 2024 5:06 pmWhat's missing is the accrued interest I paid to the seller when I first bought the bond. This does not show up in the official "1099-INT" document; there are no boxes for it. Schwab happens to include that information later in the "Consolidated 1099" document (many/most brokerages do the same.) It's in a section "Accrued Interest Paid on Purchases"
When I entered the 1099-INT into TT, I entered the regular boxes as-is, and after clicking Continue button, I checked the box "We need to adjust the taxable amount." I entered the adjustment value (accrued interest paid by me), and for "Reason for Adjustment" I selected "My accrued interest is included in this Form 1099-INT."
This is the key for TT to add a line to Schedule B, Part I. it says "Accrued Interest" and the amount is negative (accrued interest paid to me).