A local municipal bond underwent a "determination of taxability" in 2012, and was found to be no longer tax exempt. If interested, this link may or may not take you to the bond. Disclosure notice dated May 17 2012 says the interest is now taxable: http://emma.msrb.org/SecurityView/SecurityDetailsARD.aspx?cu... The bond is in my brokerage account, so I assume its still held in "street name." I got my 2013 1099-INT from my broker, and the interest paid to me from this bond is listed as Tax-Exempt on line 8. I called the issuer, Bank of Ok, and they said the interest is taxable. I called the broker, and emailed him a copy of the disclosure notice. He said the bond is still listed as tax exempt on the site that he uses. Soooo...if my broker does not submit a revised 1099INT, do I just fill in the blanks on turbo tax from the existing 1099 INT with no changes? Or am I supposed to move the amount on Line 8 Tax Exempt Interest up to Line 1 Interest Income?
Soooo...if my broker does not submit a revised 1099INT, do I just fill in the blanks on turbo tax from the existing 1099 INT with no changes? Or am I supposed to move the amount on Line 8 Tax Exempt Interest up to Line 1 Interest Income? Let's rephrase your question.Your neighbor pays you $10,000 to do some work for him. He doesn't issue a 1099 since it wasn't in the course of his trade or business. Since you didn't get a 1099 it's not taxable income?PhilRule Your Retirement Home Fool
Let's rephrase your question.Phil, how about we rephrase it in a way that's not so accusatory?Like:"The broker is telling me it's not taxable - and that's what they're reporting to the IRS. This news article is telling me it is taxable. How do I do the right thing and not have the IRS bug me about the 1099 not matching my return in 15 months? I tried getting the broker to fix it already, and they won't, so now what?" As for the OP's question:I don't know if the best option is to put it as income that wasn't reported on a 1099, or to tell the software that it's really on line 1 of the 1099.
I'd just tell your tax software it was taxable. So move the amount from box 8 to box 1.--Peter
How do I do the right thing and not have the IRS bug me about the 1099 not matching my return in 15 months?OK, once more even though if I had a nickel in my pocket for every time I've said it I'd have a dreadful hernia. Information documents such as the 1099 are for the IRS's use in making sure that income is not underreported. They are not bothered when you report income that's not recorded on a 1099.PhilRule Your Retirement Home Fool
Thanx much guys, I do appreciate the replies. The bond desk that my broker went to research info is a big name (I won't write it), so I feel uncomfortable thinking of them being wrong. But the disclosure is written in very plain English that even I can understand, seems like its taxable to me. So, I'll move the amount up to line one in turbo tax. I file paper copies, so I'll probably attach a short note saying what I did....not that I'm expecting anyone to ever read it. On line 10 of 1099-INT, the broker lists the CUSIP number of my tax exempt bonds. I wouldn't want some IRS person auditing my return, researching the bonds, finding a bond there that is no longer tax exempt, and then moving the amount from Line 8 to Line 1 after I already did that. Thanx again.
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