A bond bought at a premium leads to a loss at maturity. Page 3 of 10 * This is important tax information and is being furnished to the Internal Revenue Service. Accrued OID at Purchase = 2 /10 × $200 = $40. S. Under Wages & Income select Interest on 1099-INT. Vanguard Short-Term Tax. Select Federal Taxes. Inside addition, New Sweatshirt Problems about New IRS Bond Premium Amortization Rules ' s instructions intimate such amortizable premiums are excluded for that state ' sec mandatory add-back by statement, “When you total your interest income on Lines 15a and 15b, the amount must correspond the total of taxable and tax-exempt. 10. We then subtract this amount from $5,000 which is the amount of coupon earned for 1 year. The bond pays out interest, but loses $368 of value during the holding period. I'm. The 2017 tax law increased the phase-out thresholds for AMT meaning fewer filers will be subject to AMT under the new tax laws. Do not include the accrued interest that you may have paid at the purchase date. The second de minimis rule is the De Minimis Market Discount Rule, which only indirectly applies to OID bonds, but has significant effects, particularly Reporting interest and bond premium. Information about tax-advantaged bonds, including tax-exempt, tax credit and direct pay bonds. 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. 2 of Notice 2010. Then by entering the premium amount on line 10, the net reported tax-exempt interest will be reduced. Bond premium on tax-exempt bond $ 14 . 10. The phase-out threshold is $1,079,800 for 2022 for married filing jointly. You will receive a copy of IRS Form 1099-INT, Interest Income, for each bond you held that paid interest during the year. Enter the state that pays your tax-exempt. For more information,. The payer may, but is not required to, report the OID for a tax-exempt obligation that is a covered security acquired before. In this case, the IRS looks at what it calls combined income, which is your adjusted gross income plus tax-exempt interest and half of your Social Security benefits. Under § 1. The reissuance rules apply to all tax-exempt bonds from a large bond issue to a small. 22:. See the Instructions for Form 6251. (a)(1) through (a)(4)(i)(B) [Reserved]. Is the tax-exempt OID on the federal level reported on the tax. It is a municipal bond that matured and the premium was more than tax exempt amount. If your combined income is less than $34,000 for individuals and $44,000 for couples filing jointly, up to 50%. Specified private activity bond interest $ 10 . (2) In lieu of any deduction under Section 24360, the amount of any premium so allocated to any interest. withholding. You are required to report tax-exempt income on Form 1040, and may be required to report it. However, the state will only save $25. When governments issue bonds, specific considerations are likely to apply to bond proceeds. Therefore, a tax-exempt bond purchased at a premium and held to maturity may result in no capital loss at maturity, because the basis will have been adjusted down to the bond’s face value. 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. ) Loans of $10,000 or less between individuals who are not in the. Maintains a dollar-weighted average maturity of 1 to 2 years. Report the bond’s interest on Schedule B (Form 1040A or 1040), line 1. 03-06-2023, 09:01 PM. Taxable bonds. Sixty percent of any gains will be taxed at a long-term capital gains rate of 20 percent. However, OID bonds purchased in a. 4- Federal income tax withheld 0. See the instructions above for a tax-exempt covered security acquired at a premium. Tax-exempt OID $ 12 . Enter your 1099-INT information, select Continue. – Issuer may have an option to issue tax exempt bonds or not. If your client is subject to state tax, you'd need to look at the supplemental info to determine the out of state portion that would be subject to tax in each state. If you receive income from bonds or other obligations that are exempt from Illinois Income Tax, the exempt amount you are entitled to claim is the interest net of bond premium amortization. 3% tax-equivalent yield, would offer inflation-beating returns every year—right up until. See the instructions above for a tax-exempt covered security acquired at a premium. A bond sold at par has its coupon rate equal to the prevailing interest rate in the economy. By contrast, premium bonds are rarely offered in the taxable market. (2) Tax-exempt. your basis at the call date after amortizing the premium using the yield to call. tax-exempt bonds). State tax withheld $ $ 2021. (C) Carryforward in holder's final accrual period —( 1) If there is a bond premium carryforward determined under § 1. TaxWise calculates this amount to Form 6251. What are the benefits of tax-exempt bonds? Interest rates on tax-exempt bonds are considerably lower than interest rates on comparable taxable obligations. ) (screen 27. read more Bond premium Bond premium on Treasury obligations Bond premium on tax-exempt bond Tax-exempt and tax credit bond CUSIP no. Since Connecticut taxes interest on out-of-state bonds, the taxpayer adds back. The Bloomberg Municipal Bond Index is a rules-based, market-value-weighted index engineered for the long term tax-exempt bond market. 00 7- Foreign country or US possession: 6- Foreign tax paid: 0. For this example, Form 1099-Int has 17,000 in box 3 (for treasury bonds) so on the state return (SC) there's a subtraction from federal taxable income for 17,000 on page 2 of SC1040 to arrive at state taxable income which makes perfect sense to me since treasury bond interest is nontaxable to the state. For example, if 100 bonds are. They also won’t incur a capital loss at maturity since the premium. If the bond yields tax-exempt interest, the taxpayer must amortize the premium. 1041-US: Interest, dividends, and tax-exempt income FAQs. 22-Sep-2019 6:06am. with adjustments proper to reflect unamortized bond premium, with respect to the bond, for the period before the date as of which subsection (a) becomes applicable with respect to the taxpayer with respect to such bond. 6045-1(a)(15)(i)(C) to determine if a debt instrument is a covered security. 30% (0% in CA, CT, NY) The income earned in these funds is fully taxable at the federal level. 1. Interest Income. 05%. What if I have income from obligationsAn individual who received $421 in interest from bonds issued by another state and purchased after December 31, 2011, will have to “add back” $421 to the amount of income used to calculate the tax obligation for Indiana. Unlike Tax-exempt interest dividends (Box 12 in 1099-DIV) which TT has a additional adjustment section for that I assume applies for Federal as well as the states we. 42%. 1. Category Muni National Long. CT modifies federal AGI by adding tax exempt interest to federal AGI. Box 14: Tax-exempt and tax credit bond CUSIP. of interest income. The difference between these two amounts is the OID. 00 Bond premium- Tax-exempt obligations (AMT, noncovered lots) 0. 2014—Subsec. 33 of accrued interest you collected on the date of sale, for total tax-exempt interest income of $711. See Regulations section 1. Except as provided in paragraph (c)(3) of this section, a taxable bond is any bond other than a tax-exempt. or. However, in the case of a taxable bond, if you have beenHow to report acquisition premium on tax exempt bonds. My interest income is $0. read more Gagan, CPAthat are exempt from income tax providing these amounts are included in your Illinois base income. Initial Investment 3,000. Municipal bonds are typically issued with an optional redemption date or “call date” (i. R. State identification no. Taxable OID, tax-exempt OID and bond premium are reported on Form 1099-OID like yours. A. 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. " Fidelity does it according to the IRS guidance. Original issue discount (OID) is a form of interest. S. Report the taxable amount of the OID ($2910) on Schedule B, Part I, line 1 as. 000% Dated Date: 05/01/2020 Maturity Date: 02/15/2027Therefore, the OID on tax-exempt bonds is tax free, while the OID on taxable securities is subject to taxation as interest income. 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. (or it was called): Your cost basis at the date of sale is determined by the yield to maturity method. Here's what you need to know about this type of interest and tax form. For example, if an investor. Per the IRS Instructions for Form 1099-INT - - Box 14. 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). In line 16 - (11) Bond premium, enter the amount. 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. Tax-exempt and tax credit bond CUSIP no. This premium is due to the fact that the bond is paying a higher interest rate than the stated rate for similar bonds. I. 00 9- Noncash liquidation distributions 0. 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. To enter exempt interest dividend and specified private activity in Turbo. Bond premium Bond premium on Treasury obligations Bond premium on tax-exempt bond Tax-exempt and tax credit bond CUSIP no. Refer to the screenshots below. 16 . § 171 (b) (1) (C) —. I don't see any place on the Additional Information Worksheet that indicates a place to put "Noncovered Bond Premium on Tax-Exempt Bonds" nor for "Muni. The following includes answers to common questions about interest, dividends, and tax-exempt income. See the Instructions for Form 6251, Alternative Minimum Tax for Individuals. The amortization amount taken for federal income tax purposes must be added back on Line 3 of PA-40 Schedule A, Interest Income, while the Pennsylvania amortization amount is. If you receive income from bonds or other obligations that are exempt from Illinois Income Tax, the exempt amount you are entitled to claim is the interest net of bond premium amortization. (B) read as follows: “(i) with reference to the amount payable on maturity or on earlier call date, in the case of any bond other than a bond to which clause (ii) applies, or and “(ii) with reference to the amount payable on. In Box 88 - State, enter XX. Box 12 Bond Premium on U. (3) Bonds the interest on which is partially excludable. (iii) Bond premium allocable to the first accrual period. Enter in column C the interest you identified as tax-exempt interest on your federal Form 1040 or 1040-SR, line 2a, and which you received from: The federally exempt interest dividends from other states, or their municipal obligations and/or from mutual funds that do not meet the 50% rule as previously discussed. 75-1 Treatment of bond premiums in case of dealers in tax-exempt securities. 8 billion Vanguard Tax-Exempt. I have a form 1099-INT that lists tax exempt interest on line 8 and bond premium on tax exempt bonds on line 13. Minnesota Bond Premium Adjustment. I also have the same issue with my 1099-INT where my bond premium (box 11) is greater than interest income (box 1). Vanguard's $199 billion municipal bond lineup includes a wide range of actively managed national, state-based, high-yield, and money market funds, as well as the $20. See the Instructions for Form 6251, Alternative Minimum Tax for Individuals. If boxes 8 and 11 are blank. (ii) Tax-exempt obligations. California Code, Revenue and Taxation Code - RTC § 24363. A Longstaff study found that the marginal tax rate embedded into the short term tax-exempt municipal rates is able to identify an average marginal tax rate during a particular period of 41. how do I report these in Federal Tax?. I. In the left-hand navigation, click. It doesn't matter how you split up the interest in. A premium bond is one in which the market price of the bond is higher than the face value. Tax exempt bond fund: Which one? by ram » Fri Dec 25, 2020 4:39 am. If the Tax-exempt income is coming from a Passthrough it is entered in Passthrough K-1's, Screen 23. Issued on or before 9/27/85. During the life of the bond, the premium amount is amortized and reduces the amount of t/e interest income received. For taxable bonds, the adjustment will reflect on Schedule B, Part 1. If your client needs to file Form 1116 see the following article: Amortizable bond premium on tax-exempt bonds. The investor pays no tax on the income stream from such bonds, but would also be allowed to deduct the premium, offsetting other taxable income. Example of Premium Bond Amortization. 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. What if I have income from obligationsAn individual who received $421 in interest from bonds issued by another state and purchased after December 31, 2011, will have to “add back” $421 to the amount of income used to calculate the tax obligation for Indiana. If only two of the three agencies rate. A percentage of the income is exempt from state income tax. Private Activity Bond - PAB: Tax-exempt bonds issued by or on behalf of local or state government for the purpose of providing special financing benefits for qualified projects. 0745% compounded annually. A new box 13 has been added to Form 1099-INT to report bond premium on tax-exempt bonds. How to enter an election to amortize bond premium. So this option. In a simplified example, if you buy a five-year bond with a 6% coupon at a price of 105, and amortize one point of premium a year for the five years, then each year you can deduct $10 of the $60. Clarifications would be appreciated, if I am doing this wrong. For a taxable covered security acquired at a premium, unless you notified the payer in writing in accordance with Regulations section 1. • Qualified hospital bonds. The U. Click on the box My form has info in more than just these boxes (this is uncommon). 25% equals 4. Therefore, the sum of all amounts payable on the bond (other than the interest payments) is $100,000. The fund trades on the New York Stock Exchange and comes attached with a 0. Ordinary Dividends - Select New and enter the details. K. The bond premium allocable to the accrual period ending on February 1, 2000, is. When sold for more of the face value, they are sold with a premium; when less than face value, a discount. Reporting interest and bond premium. However, if tax-exempt bonds incorporate a tax-related convenience premium, these premia may be larger in high-tax states where the protection from taxation these bonds provide may be particularly prized by tax-averse investors. The DNI of $73,450 is calculated on line 7 of Schedule B. Box 13 Bond Premium on Tax-Exempt Bond: $64. The last three. What should I do with this?(Amortized Bond Premium). Muni bond interest can also impact how your Social Security is taxed. 03-06-2023, 09:01 PM. Taxable OID, tax-exempt OID and bond premium are reported on Form 1099-OID. Municipal bonds. If there's an amount in box 8. The 2% par bond in our example would have a modified duration of 4. In other words, a bond having a par value (redemp-tion value at maturity) of $1,000 would be purchased for. State identification no. If the bond yields tax-exempt interest, you must amortize the premium. Box 10 shows bond premium amortization. How to report acquisition premium on tax exempt bonds. (b)(1)(B). See the Instructions for Form 6251. Marietta City Hall. Under § 1. Learn more. It’s taxable as it accrues over the term of the bond. For the purpose of this example, assume an investor had a tax-exempt interest dividend distribution of $1,000. 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. *. From the left of the screen, select Income and choose Interest Income (1099-INT, 1099-OID) . Bond Premium on Tax-Exempt Bond. Tax-exempt income. 744 & 745) E E Production Credit Associations E E Puerto Rico E E Puerto Rico Water Resources — 4. In general, see how to report tax-exempt interest in the Instructions forwithholding. New York Under N. However, if you acquired a tax-exempt bond at a premium, only report the net amount of tax-exempt interest on line. B. 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. This amount is included in line 8. Bond Age. The amortizable bond premium per month is $1 with respect to bonds D, E, and F, and is $. Investors need to understand the potential taxThis was $350 million in new tax-exempt bonds and $50 million in new taxable bonds. That process includes extensive fact-gathering and analysis by bond counsel to ensure that the bonds will be in compliance with federal tax law requirements. Click on the box My form has info in more than just these boxes (this is uncommon). Visit the Marietta Development Authority's webpage to learn more about MDA bond financing or contact The Economic Development Division for assistance. 1 Solution. Learn more about mutual funds at fidelity. Taxable Interest $30. ” An investor buys a bond at a discount when the dollar price paid is below the stated face value of $100. read more Box 8 is showing the gross / total interest I received on these bonds, but there is nothing showing in other boxes (including box 13), even though I bought these bonds at a premium. Bonds and bond funds are taxed in 2 ways—based on the income that's distributed and on any gains if the investment is sold at a profit. The same principle applies to Nominee. Below this subtotal, print “ABP Adjustment,” and the total interest you received. This is all very confusing in light of 1. If the state pays the high-income household $100 in interest, the household will see tax savings of $39. 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. Higher coupons deliver more of the return sooner. TTB, Pub 17 & Pub 550 seem to say the Acquisition premium of a tax exempt bond must be amortized - but how is this done? tax-exempt bonds and, if a tax-exempt OID bond purchased at the issue price in the initial offering is held to maturity, any OID associated with the bond would be treated as tax-exempt interest. *Panama Canal Bonds Specifically Exempt from Tax by U. Page 3 of 8 * This is important tax information and is being furnished to the Internal Revenue Service. 99%. That is, a bond issued at a discount might be trading at a premium price (above par) on the bond exchange. -or-. 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. It usually occurs when companies issue bonds at a price less than their redemption value at maturity. You choose to use annual accrual periods ending on February 1 of each year. 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). Box 8 is showing the gross / total interest I received on these bonds, but there is nothing showing in other boxes (including box 13), even though I bought these bonds at a premium. 00 Bond premium- Tax-exempt obligations (AMT, noncovered lots) 0. No. If these bonds were originally issued at a discount before September 4, 1982, or you acquired them before March 2, 1984, treat your part of OID as tax-exempt interest. Based on the remaining payment schedule of the bond and A's basis in the bond, A's yield is 8. 77: Discount: 4%: 2%: $2: $102: $96. 68 of. 6045-1 (n) (7) (ii) (A). section 1. For a covered security acquired with bond premium, you must report the amount of bond premium amortization for the tax year. Since rates appear to be plateauing, longer-term funds might be better located in bond funds with longer durations. 1. 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. CT modifies federal AGI by adding tax exempt interest to federal AGI. 00 5- Investment expenses 0. See Regulations section 1. For purposes of preparing the state (Calif) return I should be able to reduce the interest income on the out of state bonds by the amortized bond premium attributable to such bonds. Expense ratio. read moreI received a 1099-INT for an account holding two municipal bonds (from the same state). The $20,000 of interest income on United States bonds is to be subtracted from Federal adjusted gross income (see section 112. You can delete Schedule B using these steps: Select Tax Tools from the menu on the left. 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). However, some bonds, such as municipal bonds, may be exempt from federal and state taxes. Supplemental Info not reported to IRS: Accrued Interest Paid on Purchases $1229. S Bond Interest . Municipal bonds ETFs are generally free from federal and state taxes if they hold only tax-exempt bonds. 70 years. Do not file. 1099-OID. In the case of a tax-exempt obligation, if the bond premium allocable to an accrual period exceeds the qualified stated interest al-locable to the accrual period, the ex-cess is a nondeductible loss. Credit Quality / Interest Rate Sensitivity —. 6251 (which most people won't care these days). Tax-exempt bonds can trade at a significant discount to par when interest rates are high. BOND ORIGINALLY ISSUED AT A PREMIUM HELD TO MATURITY (023015K58) ISSUER: CITY A Coupon: 2. 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. Click Start or Update next to Interest on 1099-INT. The adjustment will reduce your amount of reportable tax-exempt interest on Form 1040, line 8b. It is possible to acquire an OID bond in the secondary market at a premium. 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. 3 [a] of this Part). 07%. In 2015, less than 1% of corporate bonds, 17% of taxable municipal bonds, and 1% of US. In fine print is says "original cost basis $10,368". 171–2, if a bond premium election were in effect for the prior taxable years, C would have amortized $3,257. 25% equals 4. Here is some helpful information from a tax professional regarding OID for tax-exempt bonds: OID is treated as interest. With a shorter-term bond, the risk premium is not as great. The true interest cost (TIC) for the sale’s tax-exempt bonds is 2. 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). Error: Schedule M1M - sum of line 1 & line 2 doesn't match Form 1040 line 2a. The tax reporting requirements outlined are not appli-cable if bonds are owned inside an IRA or other retirement plans. R. You must also enter the letter E in the NAEOB column and the exempt amount in the NAEOB Amount column. According to IRS regulations, any amount reported in Box 12 of Form 1099-DIV is to be treated as "Tax-Exempt Interest Income. Amortizable bond premium is a tax term referring to the excess premium paid over and above the face value of a bond. 8 billion Vanguard Tax-Exempt Bond ETF (Ticker: VTEB). 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. For more information, visit the community discussion for 1099-OID Box 6 and Box 11. Under your last entry on line 1, put a subtotal of all interest listed on line 1. 171–1, the amount of bond premium is $10,000 ($110,000−$100,000). Clarifications would be appreciated, if I am doing this wrong. Specified private activity bond interest $ 10 . on my 1099-Int: Box 8 Tax-Exempt Interest: $544. Interest from private activity bonds generally is not taxable, however interest. (iii) Bond premium allocable to the first accrual period. The tax-exempt part of OID on the stripped bond is limited to $17. When you purchase a bond or note at a discount, you'll get Form 1099-OID (Original Issue Discount). *** This is important tax information and is being furnished to the Internal Revenue Service. 01 Overview 1 1. 17 . 07 percent, compounded annually. However, in conduit financings, the bond documents usually delegate most responsibilities to maintain the tax-exempt status of the bonds to the Borrower. The total amount or a portion of tax-exempt income (reported as Specified Private Activity Bond Interest) must be taken into account in computing the federal alternative minimum tax applicable to individuals, and may be subject to state and local taxes. Panama Canal Zone Bonds (exempt under 31 U. Boxes 12 - 14 show state. 51%, while the premium version (FZEXX) has a seven-day yield of 2. This is the upper limit for the deduction of distributions made to. tax-exempt interest received during the year over the amortized bond premium for the year). Tax-exempt (for municipal bonds) Adjusted. UltraTax CS TL 32075 Form Field Name Not Shared . 00 10- Exempt-interest dividends (includes line 11) 0. However, each. 00. 25% of permissible premium). This is the difference between the redemption price ($100) and the issue price that would produce a YTM of 10% (0. Except as provided in paragraph (c)(3) of this section, a taxable bond is any bond other than a tax-exempt obligation. read moreor qualified private activity bonds, such as qualified 501(c)(3) bonds. S Treasury Obligations. Where is the Definition of Governmental Bonds? Treas. I have a form 1099-INT that lists tax exempt interest on line 8 and bond premium on tax exempt bonds on line 13. At least, that's how it's handled for tax-exempt Muni Bonds. One measure of the price volatility of a bond is its modified duration. To be included in the Index, bonds must be rated investment-grade (Baa3/BBB- or higher) by at least two of the following ratings agencies: Moody's, S&P and Fitch. Invests primarily in high-quality municipal securities. The remaining 40 percent are taxed at your ordinary income. Note: Enter the amount of bond premium adjustment that should carry to Schedule B as amortized bond premium adjustment. State tax withheld $ $ Form . State. The second de minimis rule is the De Minimis Market Discount Rule, which only indirectly applies to OID bonds, but has significant effects, particularlyReporting interest and bond premium. This article explains how to input an election to amortize bond premium on Form 1099-INT, line 11. Treasury Obligations shows the bond premium for the year for covered U. (a). Under § 1. Is the line 8 amount already "adjusted" for the line 13 amount, or is the interest I sh. 171–1, the amount of bond premium is $10,000 ($110,000−$100,000). 9. Under § 1. 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. 00 5- Investment expenses 0. Municipal bonds ETFs are generally free from federal and state taxes if they hold only tax-exempt bonds. 67. Under your last entry on line 1, put a subtotal of all interest listed on line 1. (If the bonds are tax-exempt bonds, any such. Fiduciary bond premiums; Legal publication costs of notices to creditors or heirs;. If half of your Social Security benefit plus other income, including tax-exempt muni bond interest, is between $32,000 and $44,000 for a joint tax return ($25,000 to $34,000 for single filers), up to 50% of your Social Security benefits may be taxable. In addition, the rules vary depending on the issuer of the bond (taxable bonds vs. Specified Private Activity Bond Interest — Shows tax-exempt interest subject to the alternative minimum tax. It has four check boxes. 11 If tax-exempt Bonds are held to maturity and their principal repaid in full, the Bond holder generally. The result is $1,775. Tax-exempt interest $500, $100 of which is attributable to accrued interest. 07%.