how you deal with muni bond premiums

[perinova]

I am finding conflicting information on the web about this, some very wrong.

The way I understand it, it will affect MAGI only. The broker reports box 13 on the 1099-INT, this is the premium for tax free bond. How is this number used?

* I am reading that the bond premium should be amortize over the life of the bond. This mean I need a spreadsheet for all the bonds purchased and calculate the ABP adjustment every year? That's quite a bit of work.

* Alternatively, you ignore the premium altogether since it may not be all that much?

* Or, you subtract box 13 to the interest in the 1040 tax exempt interest? That would mean that the broker has amortized for me.

Thanks.

 

[perinova]

Well after reading Pub 550, I am going to answer my own question

"For a tax-exempt covered security acquired at a premium, box 13 of Form 1099-INT or box 10 of Form 1099-OID shows the amount of bond premium amortization allocable to the interest paid during the tax year."

And it looks like H&R block did the right thing last year, I just didn't notice.