I do no understand what is in community about accrued market discount.
On Form 1099 B: Sales, Basis and Accrued market discount given.
I read with accrued market discount you report accrued market discount as interest income and reduce capital gain. In the cost basis section I take the basis reported and add the accrued market discount.
If I do this, then I am not double reporting the accrued market discount.
Am I correct in what I doing.
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There's an accrued market discount because the bonds were sold at a discount, which represents the interest income that would accrue through maturity upon redemption.
The amount reported in Box 1f is the amount the broker had computed for accrued market discount (or interest income) that has accrued to date on a covered security to your client at the time of sale, depending on whether your client had elected to report the accrued interest annually. Since bond prices in the markets do fluctuate from time to time, the amount realized on the sale may sometimes be less than the interest accrued, the interest income that needs to be recognized is actually the lesser of the gain or the amount reported in Box 1f.
No, there's no double whammy because you'd adjust the gain/loss on F.8949 by entering the relevant code and accrued interest recognized under columns (f) and (g).
Since the broker is only obliged to track covered securities acquired since 2011, you should check with your client to ensure the sale did not include any noncovered securities, which would require some additional computations.
Still an AllStar