While municipal bonds are available in both taxable and tax-exempt formats, the tax-exempt bonds tend to get the most attention because the income they generate is, for. This has been very helpful. So, for example, if your Acq. - Bond premium- Tax-exempt obligations (AMT, noncovered lots) 0. You are required to amortize the premium each year and this will reduce your basis (what you paid). Under Wages & Income select I nterest on 1099-INT. State. The net amount is properly reflected on the 1040, line 2a. Does the bond premium get reported as tax exempt. (b)(1)(B). 67. Tax-Exempt Interest Received by Estate or Trust. That is, a bond issued at a discount might be trading at a premium price (above par) on the bond exchange. Supplemental Info not reported to IRS: Accrued Interest Paid on Purchases $1229. Click Interest on 1099-Int, click edit/add. Go to Interest and Dividend Income. Tax-exempt interest $ 9 . Subtract the bond premium amortization from your interest income from these bonds. 744 & 745) E E Production Credit Associations E E Puerto Rico E E Puerto Rico Water Resources — 4. Under your last entry on line 1, put a subtotal of all interest listed on line 1. UltraTax CS TL 31223 Bond premium on Tax-Exempt Bond. (2) Tax-exempt. (a)(1) through (a)(4)(i)(B) [Reserved]. 15% of the average daily net assets for the Fund until April 30, 2024. S. Premium Bond: A premium bond is a bond trading above its par value ; a bond trades at a premium when it offers a coupon rate higher than prevailing interest rates. Market Discount —For a taxable or tax-exempt covered security,Exception for De Minimis Bond Premium: If the net premium and accrued interest received from the sale of bonds is not more than $50,000, the city or town, with the approval of its mayor, city or town manager or select board (as applicable), may apply such amount to the payment of indebtedness. What should I enter in the Type Code field in the interest and dividends statements? How do I enter income from a private activity bond?However, if you acquired a tax-exempt bond at a premium, only report the net amount of tax-exempt interest on line 2a of your Form 1040 or 1040-SR (that is, the excess of the tax-exempt interest received during the year over the amortized bond premium for the year). (iii) Bond premium allocable to the first accrual period. So if you did report it, it would be on Schedule B (which the Sch B totals carry over to the front page of the 1040). CT modifies federal AGI by adding tax exempt interest to federal AGI. The amounts from box 6 and 7 are used to generate a Foreign Tax Credit. Treasury Obligations shows the bond premium for the year for covered U. Maintains a dollar-weighted average maturity of 1 to 2 years. how do I report these in Federal Tax?. TL 32075 Destinations of Shared Data from Source Data Entry: UltraTax CS(taxable, treasury, tax exempt, tax exempt subject to AMT) that represent the total amount reported in box 11 (bond premium). 1. Tax-exempt income. The $20,000 of interest income on United States bonds is to be subtracted from Federal adjusted gross income (see section 112. Specified Private Activity Bond Interest — Shows tax-exempt interest subject to the alternative minimum tax. When sold for more of the face value, they are sold with a premium; when less than face value, a discount. Click Change how i enter my form. Tax-exempt interest $500, $100 of which is attributable to accrued interest. What should I enter in the Type Code field in the interest and dividends statements? How do I enter income from a private activity bond? How do I enter income that is tax-exempt at the federal level, but taxable at the state level?Therefore: Accrued OID at time of Sale = 6 /10 × $200 = $120. Boxes 12 - 14 show state. S. U. - Market discount (noncovered lots) 0. Yes, you can enter Tax-exempt interest and Specified private activity bond in form 1099- Div. With a shorter-term bond, the risk premium is not as great. The. If these are private activity bonds, you'd have a number in Box 9 that would be added back as a TPI on F. 00 11- Specified private activity bond interest dividends (AMT) 0. or. However, in conduit financings, the bond documents usually delegate most responsibilities to maintain the tax-exempt status of the bonds to the Borrower. This is all very confusing in light of 1. However, if the. State tax withheld $ $ Form . Then by entering the premium amount on line 10, the net reported tax-exempt interest will be reduced. A factor that can greatly reduce the price volatility of bonds is the presence of. Commissioner of Revenue. A trust has amortizable bond premium on both in-state tax exempt bonds and out of state tax exempt bonds. For single bonds or accounts containing a single bond, enter the CUSIP number of the tax-exempt bond for which tax-exempt interest is reported in box 8 or tax credit bond (including build. Personal Income Tax Massachusetts General Laws exempts from income taxation interest on obligations of the Commonwealth of Massachusetts, its political subdivisions, and agencies or instrumentalities of the Commonwealth and its subdivisions. I also have the same issue with my 1099-INT where my bond premium (box 11) is greater than interest income (box 1). If only two of the three agencies rate. 27). The new municipal bond index ETF is designed for tax-sensitive investors with a. If the sale price is higher than the purchase price, there may be a gain on the sale. The fund has an expense ratio of 0. Also, if you acquired a tax-exempt OID bond at an acquisition premium, only report the net amount of tax-exempt OID on line 2a (that is, the excess of tax-exempt OID for the year over the amortized acquisition premium for the year). Follow these steps to make a manual adjustment for the bond premium you paid on your tax-exempt and taxable bonds: Select Federal Taxes. Subtract this amount from the subtotal, and enter the result on line 2. " Fidelity does it according to the IRS guidance. Tax-exempt interest distribution (from your 2022 Tax Statement. S. Treasury obligation and is exempt from state and local income taxes. IF you don't, the accrued interest will be divided up proportionately (and improperly) among boxes 1, 3. This amount is included in line 8. posted. In general, see how to report tax-exempt interest in the Instructions forwithholding. During the life of the bond, the premium amount is amortized and reduces the amount of t/e interest income received. 1041-US: Interest, dividends, and tax-exempt income FAQs. At this point, the bond may sell at a "premium" or "discount. At closing, bond counsel delivers an opinion that interest on theTaxable Bond: A debt security whose return to the investor is subject to taxes at the local, state or federal level, or some combination thereof. Where do I report this and also the acquisition premium amortization? TurboTax Deluxe. (C) Carryforward in holder's final accrual period —( 1) If there is a bond premium carryforward determined under § 1. Instead, the non home state bond premiums are adjusted on the other subtractions section of the state return. 1. Go to Interest and Dividend Income. read moreor qualified private activity bonds, such as qualified 501(c)(3) bonds. Tax-Exempt Bond: Cost Basis if Held Until Maturity:. To enter the Tax-exempt interest and Specified private activity bond interest in Turbo Tax: In Federal, jump to 1099-Div and click add. Intermediate-Term Core Bond Funds ;The payer may, but is not required to, report the premium amortization for a tax-exempt obligation that is a covered security acquired before January 1, 2017, and issued with OID. Enter a description and a negative amount for the bond premium related to the state tax-exempt interest. savings bonds. Note: The bond premium on a tax-exempt bond is required to be amortized on an annual basis. In the left-hand navigation, click. Include in box 8 any accrued qualified stated interest on these bonds sold between interest dates (or on a payment date). Where do I enter bond premium non treasury obligations noncovered. 50 with respect to bonds G and H. Investors need to understand the potential taxThis was $350 million in new tax-exempt bonds and $50 million in new taxable bonds. , prepayment date without penalty) approximately 10-years from the date of issuance. The true interest cost (TIC) for the sale’s tax-exempt bonds is 2. How to enter an election to amortize bond premium. There are 3 NYS bonds. When you purchase a bond or note at a discount, you'll get Form 1099-OID (Original Issue Discount). (1) The amount of any bond premium shall be allocated among the interest payments on the bond under rules similar to the rules of subdivision (c) of Section 24361. Expenses (other than interest expense) connected with federally tax-exempt income that is taxable to New York State: X: X: X: X: S-204: Amortizable bond premiums on bonds that generate federally tax-exempt interest income that is taxable to New York State: X: X: X: X: S-205: Wage and salary expenses allowed as federal credits but not as federal. Refer to the screenshots below. However, OID bonds purchased in a. Accrued OID at Purchase = 2 /10 × $200 = $40. 35% 7. § 171 (b) (1) (C) —. When the bond matures, the. It has four check boxes. You are required to report tax-exempt income on Form 1040, and may be required to report it. For Pennsylvania personal income tax purposes, a premium paid on a bond is deemed to be an investment in the bond to obtain the higher bond interest rate. Premium: 4%: 6%: $6: $106: $103. Ultra Short Bond Fund - the Advisor has contractually agreed to waive management fees in an amount equal to an annual rate of 0. Instead the amortization amount is just showing in the 1099 in the "Adjustments" section, under "Bond premium - Tax-exempt obligations (noncovered lots)", but it. For purposes of the restrictions against federal guarantees of tax-exempt bonds under § 149(b), a Build America Bond is not treated as federally guaranteed by reason of the credit allowed under § 54AA(a) or § 6431. To figure your gain or loss on the sale or trade of these bonds, reduce the amount realized by your part of OID. Therefore, the OID on tax-exempt bonds is tax free, while the OID on taxable securities is subject to taxation as interest income. Enter your 1099-INT information, select Continue. A California bond is federal tax-free, so on his federal return, the taxpayer reports $40 in tax-free interest ($50 minus $10 in amortizable premium) and reduces his basis in the bond from $1,100 to $1,090 in the first year. If there's an amount in box 8. Here's where the fun begins. 171–1, the amount of bond premium is $10,000 ($110,000−$100,000). 8 billion Vanguard Tax-Exempt. 07. Premium. municipal bonds purchased with accrued interest paid. For example, if 100 bonds are. This nondeductibility (and accompanying adjustment to basis) for tax-exempt bond premiums became Federal law in 1942. Bond premium- Tax-exempt obligations (noncovered lots) 0. Lesson 4 also discusses the rules for depreciation of tax-exempt bond financed property set forth § 168 and the rule under § 57(a)(5) that requires individuals and corporations to include tax-exempt interest from “specified private activity bonds” in income for purposes of figuring the alternative minimum tax. S Bond Interest . If you have an amount listed in Box 13, please disregard unless you are. BOND ORIGINALLY ISSUED AT A PREMIUM HELD TO MATURITY (023015K58) ISSUER: CITY A Coupon: 2. You can delete Schedule B using these steps: Select Tax Tools from the menu on the left. Effectively, that means the yield on a municipal bond paying 3. section 1. I can't do a manual adjustment as I'm doing a standard deduction, not itemized deduction. In box 11, Bond Premium, put the amount. General Explanation of Tax-Exempt Bonds 1. Since rates appear to be plateauing, longer-term funds might be better located in bond funds with longer durations. Because discount bonds are sold below face value, it is expected. In 2015, less than 1% of corporate bonds, 17% of taxable municipal bonds, and 1% of US. However, if you acquired a tax-exempt bond at a premium, only report the net amount of tax-exempt interest on line 2a of your Form 1040 or 1040-SR (that is, the excess of the tax-exempt interest received during the year over the amortized bond premium for the year). Section 2 Tax Exempt and U. Resources for issuers, borrowers and bond professionals. If adjustments for bond premiums are not reflected on your 1099-INT, you can manually enter the bond premium adjustment in the 1099-INT section of TurboTax. • the bond-financed property will be OWNED by the governmental unit. State tax withheld $ $ 2021. (iii) Bond premium allocable to the first accrual period. How to report acquisition premium on tax exempt bonds. Taxable bonds. Bond premium on tax-exempt bond $ 14 . The bond pays qualified stated interest of $10,000 on February 1 of each year. To. Municipal bonds have a face value. Specified private activity bond interest $ 10 . Instead the amortization amount is just showing in the 1099 in the. The new ETF will complement our existing actively managed limited-term and ultra-short-term tax-exempt. 00 Bond premium- Tax-exempt obligations (AMT, noncovered lots) 0. April 11, 1980. Box 2 - Other periodic interest. 00 13-Bond premium on tax-exempt bonds (categorized below) 0. Investment Policies, local or state investment restrictions, legal requirements such as the arbitrage yield permitted under federal tax rules, limitations in bond indentures or bond ordinances, requirements from bond covenants and/or credit enhancement. BOND ORIGINALLY ISSUED AT A PREMIUM HELD TO MATURITY (023015K58) ISSUER: CITY A Coupon: 2. Municipal bonds. Tax-exempt and tax credit bond CUSIP no. Level 15. You are required to report tax-exempt income on Form 1040, and may be required to report it. 25% of permissible premium). 10. §12-701(a)(10)(A)(vi) and (vii), any interest on indebtedness incurred or continued to purchase or carry obligations or securities, the interest on which is exempt from Connecticut income tax, and the amortizable bond premium for the taxable year on any bonds or obligations, the interest. 89%. o It is also possible that a bond that was issued with OID is later bought at a premium. That percentage varies from year to year. Deduct the Acquisition Premium ($790) from the Tax Exempt OID to get the taxable amount ($3700 - $790 = $2910). your basis at the call date after amortizing the premium using the yield to call. 1. I also have the same issue with my 1099-INT where my bond premium (box 11) is greater than interest income (box 1). 00 12-Bond premium on Treasury obligations (covered lots) 0. 8 billion Vanguard Tax-Exempt Bond ETF (Ticker: VTEB). 1 A closing binder and/or CD or other electronic copy of relevant and customary transaction documents is saved and stored properly. A holder may elect to amortize bond premium on a taxable bond. Complete this screen as if your Tax-Exempt Dividend Income was reported in Box 8 of a 1099-INT. Vanguardfi Ultra-Short-Term Tax-Exempt Fund As of September 30, 2023 InvestmentApproach Short-term municipal bonds. 00 7- Foreign country or US possession: 6- Foreign tax paid: 0. This entry is used to reduce taxable interest entries that carry to Schedule B. In eras of slimmer returns, taxes take on added importance to portfolio performance. Vanguard today launched the Vanguard Short-Term Tax-Exempt Bond ETF (NYSE Arca: VTES). To properly enter this and resolve the diagnostic, net the amount of Municipal Bond interest by subtracting $100 from the $500 total and entering $400 in the applicable Municipal bond input field. Market discount $ 11 . 1099-OID (Rev. Consolidated 1099 When tax exempt interest is partially taxable to the state, do the following: Go to Income > Consolidated 1099Tax exempt interest is entered in State Tax-exempt interest (U. This amortized amount is not deductible in determining taxable income. For example, an investor in a 25% tax bracket would receive the same after-tax income from a tax-exempt bond bearing interest at 6% that he or she would receive from a taxable obligation. Enter a description and a positive amount for the state tax-exempt interest. The result is $1,775. This is the upper limit for the deduction of distributions made to. This article explains how to input an election to amortize bond premium on Form 1099-INT, line 11. The bond pays out interest, but loses $368 of value during the holding period. Report the bond’s interest on Schedule B ( Form 1040A or 1040 ), line 1. Based on the remaining payment schedule of the bond and A's basis in the bond, A's yield is 8. Once information is completed, Lacerte generates an election statement with the election language and bond information. The account was opened late. Box 12 Bond Premium on U. Bond premium Bond premium on Treasury obligations Bond premium on tax-exempt bond Tax-exempt and tax credit bond CUSIP no. California does not tax: Interest on governmental obligations. The amount entered as municipal bonds correctly gets asdded back on the NYS return on line 20. For this purpose, a bond can be in any form of indebtedness under federal tax law, including a bond, note, loan, or lease-purchase agreement. Line 2 State, enter another state or XX; Line 3 Additional Tax Exempt Interest dividends, enter the portion that is taxable to the state from Box 11; Calculate the return. Client has 1099-Int and within the paperwork there is an amount for "Noncovered Bond Premium on Tax-Exempt Bond" and an amount for Welcome back! Ask questions, get answers, and join our large community of tax professionals. Box 13. NUVEEN INSD TAX-FREE ADVANTAGE MUN FD 1. How to enter an election to amortize bond premium. Vanguard Style View: Muni National ShortA judge for the New York Division of Tax Appeals rejected the couple's arguments that New York's conformity to the federal code requires interest income from federally tax-exempt bonds issued by. • Nongovernmental output property bonds. Municipal bonds have a face value. If this applies, enter the amount of the tax-exempt interest. The difference between these two amounts is the OID. California Code, Revenue and Taxation Code - RTC § 24363. Market discount on a tax-exempt bond is not tax exempt. Fields highlighted in yellow import into the UltraTax CS Source Data Entry application. This limitation on tax-exempt OID ensuresThe amortization of a bond premium on a tax-exempt bond is the excess on its face value or the premium and part of the premium can be deducted from the interests. on my 1099-Int: Box 8 Tax-Exempt Interest: $544. I net purchased accrued interest (purchased interest) and box 13 on 1099 INT (Bond Premium on TEB) against total Tax Exempt Interest (Box 8 on 1099 INT). To enter exempt interest dividend and specified private activity in Turbo. Bond Premiums and Interest Rates. (b) Amortizable bond premium (1) Amount of bond. If the taxpayer decides that it is still needed, use the Total municipal bonds and Amortizable bond premium on tax-exempt bonds fields in the Tax Exempt Interest section of Screen 11 to add box 6 and box 11. Bond premium on tax-exempt bond $ 14 . Instead the amortization amount is just showing in the 1099 in the "Adjustments" section, under "Bond premium - Tax-exempt obligations (noncovered. Bond premium- Tax-exempt obligations (noncovered lots) 0. The bonds mature at par so the total premium paid is $7,485 ($107,485-$100,000. If your client needs to file Form 1116 see the following article: Amortizable bond premium on tax-exempt bonds. that are exempt from income tax providing these amounts are included in your Illinois base income. 10. For young or lower income tax payers it is probably fine to. Amortization of bond premium under IRC Section 171; For. VTES predominantly invests in short-term investment-grade municipal bonds and will track the S&P 0-7 Year National AMT-Free Municipal Bond Index. 22:. We then subtract this amount from $5,000 which is the amount of coupon earned for 1 year. Section 171 (a) (2). For a specified private activity bond with OID, report the tax-exempt OID in box 11 on Form 1099-OID and the tax-exempt stated interest in boxes 8 and 9 on Form 1099. You have it backwards unfortunately. You. Specified Private Activity Bond Interest — Shows tax-exempt interest subject to the alternative minimum tax. Tax-exempt and tax credit bond CUSIP no. New York Under N. Furthermore, he argues that the risk premium. Form field Folder > Screen Field Statement column; Payer's Name: Income > B&D: Interest Income: Description: Recipient's TIN: Income > B&D: Interest Income: T S J: Box 1 - Interes Because bond premium amortization is mandatory for tax-exempt Bonds, a Bond holder who has acquired a tax-exempt Bond with bond premium must amortize the premium over the term of the Bond, reducing the basis in the Bond by such amortization. 4077, Tax-Exempt Bonds for 501(c)(3) Charitable Organizations and IRS Publication 5271, Complying with Arbitrage Requirements: A Guide for Issuers of Tax-Exempt Bonds. In the left-hand navigation, click on Election 1. My interest income is $0. Follow these steps to make a manual adjustment for the bond premium you paid on your tax-exempt and taxable bonds: Select Federal Taxes Under Wages &. See § 6. A bond bought at a premium leads to a loss at maturity. Pub. Depending on the type of bond, the premium can be tax deductible and amortized. The Mechanics of Refunding Bonds. 113–295, § 221(a)(29)(A), amended subpar. You must enter the ordinary dividends on box 1a and qualified dividends on box 1b. Also, if you acquired a tax-exempt OID bond at an acquisition premium, only report the net amount of tax-exempt OID on line 2a of your Form 1040 or 1040-SR (that is, the excess of the tax-exempt OID for the year over the amortized acquisition premium for. The amount entered as Amortizable bond premium on tax exempt - which reduces the amount of tax exempt interest on the federal return, however the add back for NYS is the full amount. Review resources for tax-exempt bond holders in IRS publications. Do not include the accrued interest that you may have paid at the purchase date. R. For a specified private activity bond with OID, report the tax-exempt OID in box 11 on Form 1099-OID and the tax-exempt stated interest in boxes 8 and 9 on Form 1099-INT. Panama Canal Zone Bonds (exempt under 31 U. 31% (0% in CA, CT, NY) Fidelity Treasury Money Market Fund (FZFXX) 0. Then, figure out how many months are left before the bond matures and divide the bond premium by the number of months remaining. A NY resident with NY income in excess of $1,000,000 purchases a 5-year $100,000 Washington state tax-exempt bond with a 3% coupon for $105,000 since market conditions dictate a 2% yield on this bond. A comprehensive Federal, State & International tax resource that you can trust to provide you with answers to your most important tax questions. 150-1(b) defines a governmental bond as any bond of an issue of tax-exempt bonds in which none of the bonds are private activity bonds. The TIC for the most recent tax-exempt bond sale on June 8, 2022, was. 19 of tax-exempt interest on your 2009 return (Form 1040, line 8b) from the discount accretion in addition to the $500. I net purchased accrued interest (purchased interest) and box 13 on 1099 INT (Bond Premium on TEB) against total Tax Exempt Interest (Box 8 on 1099 INT). For a tax-exempt covered security acquired at a premium, box 13 shows the amount of bond premium amortization allocable to the interest paid during the tax year. Reporting bond premium amortization for noncovered tax-exempt municipal bonds. 1 Solution. 3 [a] of this Part). 6%. Is the line 8 amount already "adjusted" for the line 13 amount, or is the interest I sh. Tax Reform Act of 1986 The TRA 1986 greatly reduced private activities that may be financed with tax-exempt bond proceeds. On the 1099-INT box 13 has an amount of $ 13,833 of which all is under "Tax-exempt obligations (covered lots)". There are three entries block 7 the description (name), box 11 Tax exempt OID ($3700) and block 6 acquisition premium ($790). Investor class expense ratios include 0. However, OID bonds purchased in a. 1099 from bond funds and tax exempt amount. 00 Box 11 Tax-exempt OID is generally reported as tax-exempt interest on Form 1040. In fine print is says "original cost basis $10,368". 07%. To report amortized bond premiums on tax-exempt bonds from 1099 box 13 follow these steps. You can see the $368 loss is not taken. There are three entries block 7 the description (name), box 11 Tax exempt OID ($3700) and block 6 acquisition premium ($790). (2) Taxable bonds. *** This is important tax information and is being furnished to the Internal Revenue Service. Form 1099-OID, Original Issue Discount, exists to report income when bonds, notes, or certificates of deposit (CDs) are sold at a discount from their maturity value. 00 Market discount (noncovered lots) 0. 00 in borrowing costs (the $100 of interest × the 25 percent reduction in the interest rate). How you. What should I do with this?(Amortized Bond Premium). In the next page, - enter the NON-covered premium amount as a positive number, and. 06 and bond premium is $1. 171–2, if a bond premium election were in effect for the prior taxable years, C would have amortized $3,257. VTES may be suitable for tax-sensitive investors with a short-term time horizon and low interest rate risk tolerance. The amortization is calculated by: First, calculate the bond premium by subtracting the face value of the bond from what you paid for it. Bond Premium on Tax-Exempt Bond. Fidelity Government Money Market Fund (SPAXX) 0. Options. If you bought a TAX-EXEMPT bond at a PREMIUM and sold it PRIOR to maturity. Note that the tax on OID is paid annually, but the value is needed to determine your basis and the amount of market discount. First, the code declares that the amortizable bond premium deduction cannot be taken for tax-exempt bonds. However, each year you must reduce your basis in the bond (and tax-exempt interest otherwise reportable on Form 1040, line 8b) by the amortization for the year. F. The OID on the stripped bond that is more than the tax-exempt part is $3. As of November 13, 2023, the fund has assets totaling almost $16. 0745% compounded annually. (iii) Bond premium allocable to the first accrual period. 8 billion Vanguard Tax-Exempt. The 2% par bond in our example would have a modified duration of 4. For purposes of the restrictions against federal guarantees of tax-exempt bonds under § 149(b), a Build America Bond is not treated as federally guaranteed by reason of the credit allowed under § 54AA(a) or § 6431. 15 . Tax-exempt OID $ 12 . 171–4 for rules relating to the election to amortize bond premium on a taxable bond. Thus, under § 1. The tax reporting requirements outlined are not appli-cable if bonds are owned inside an IRA or other retirement plans. 15 State 16 State identification number 17 State tax withheld FATCA filing requirement . a facility financed with tax-exempt bonds, the research agreements may result in the bonds meeting the private business use test. 01 Overview 1 1. This amount is listed in Box 11 for corporate bonds, while Box 12 includes such amounts for Treasuries and Box 13 has tax-exempt bond premium amounts. Refer to the screenshots below. Under § 1. Is the line 8 amount already "adjusted" for the line 13 amount, or is the interest I sh. " When an existing bond offers a higher coupon rate than the rate currently offered on new bonds, it typically trades above (premium) its par value on the secondary market and becomes a premium bond. Below this subtotal, print “ABP Adjustment,” and the total interest you received. If adjustments for bond premiums are not reflected on your 1099-INT, you can manually enter the bond premium adjustment in the 1099-INT section of TurboTax. State identification no. Importing financial institution data into Lacerte with Tax Import. Go to Screen 46, Elections. For a taxable covered security acquired at a premium, unless you notified the payer in writing in accordance with Regulations section 1. During the life of the bond, the premium amount is amortized and reduces the amount of t/e interest income received. However, if you acquired a tax-exempt bond at a premium, only report the net amount of tax-exempt. Min. It usually occurs when companies issue bonds at a price less than their redemption value at maturity. C. Below this subtotal, print “ABP Adjustment,” and the total interest you received. Stadium Bonds T T Small Business Administration E E Student Loan Marketing Association (Sallie Mae) E EGenerally, a reissuance occurs under federal tax law when there are significant modifications to the terms of a bond so that the bond ceases to be the same bond for tax purposes. The amount is used to reduce the amount of tax-exempt interest reported on line 8b, Form 1040, and also reduces the taxpayer's basis in the bond. 00 9- Noncash liquidation distributions 0. See Box 13 Bond premium on tax-exempt bond X Box 15 State B&D Interest Income State W/H Box 16 State identification no. 12-06-2019 04:38 PM. In Box 88 - State, enter XX. tax-exempt Bond with bond premium must amortize. Bond premium on Treasury obligations $ 13 . 42%. A new accounting rule that changes the calculation of bond premium amortization on certain callable debt securities could create tracking headaches due to the book-to-tax differences that might result. James Comtois March 9, 2023. Several TurboTax users have noted that TurboTax claims that Charles Schwab 1099-OID’s for tax-exempt bonds with a positive bond premium in Box 10 must have Box 10 manually reduced to 0 because Schwab provides no Box 2 value and it is treated as being null (0).