Bond premium on tax exempt bond ultratax. C. Bond premium on tax exempt bond ultratax

 
CBond premium on tax exempt bond ultratax  read moreI received a 1099-INT for an account holding two municipal bonds (from the same state)

State. tax-exempt bonds). How to enter an election to amortize bond premium. How do you record bond premium on tax-exempt bonds? If the bond is a tax-exempt municipal, you report the loss of premium value and subtract the loss from. Tax exempt bond fund: Which one? by ram » Fri Dec 25, 2020 4:39 am. The Vanguard Municipal Money Market Fund (VMSXX) has a seven-day yield of. 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. 2 of Notice 2010. 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). That is, a bond issued at a discount might be trading at a premium price (above par) on the bond exchange. Schedule B, line 1. Initial Investment 3,000. 2 or $253,000. Back to Table of ContentsThis article will help you input 1099-INT amounts into Lacerte. A tax term, the amortizable bond premium refers to the excess price (the premium) paid for a bond, over and above its face value. 25%. Report the bond’s interest on Schedule B (Form 1040A or 1040), line 1. This nondeductibility (and accompanying adjustment to basis) for tax-exempt bond premiums became Federal law in 1942. Where do I enter bond premium non treasury obligations noncovered. Box 13 Bond premium on tax-exempt bond X Box 14 Tax-exempt and tax credit bond CUSIP no. 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. Expense ratio. . At least, that's how it's handled for tax-exempt Muni Bonds. The issue price of the debt instrument is $110,000. A bond with a face value of $250,000 and a stated rate of 12% is now being offered at 101. Specified Private Activity Bond Interest — Shows tax-exempt interest subject to the alternative minimum tax. To report amortized bond premiums on tax-exempt bonds from 1099 box 13 follow these steps. tax-exempt interest received during the year over the amortized bond premium for the year). 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. Box 6 - Acquisition premium. Reporting interest and bond premium. Go to Interest and Dividend Income. For a private activity bond to be tax-exempt, 95% or more of the net. savings bonds. If the sale price is higher than the purchase price, there may be a gain on the sale. Interest from private activity bonds generally is not taxable, however interest. amount of bond premium amortization for the tax year. Pub. 77: Discount: 4%: 2%: $2: $102: $96. 1099-OID. The following includes answers to common questions about interest, dividends, and tax-exempt income. Municipal bonds are typically issued with an optional redemption date or “call date” (i. Options. Instead the amortization amount is just showing in the 1099 in the "Adjustments" section, under "Bond premium - Tax-exempt obligations (noncovered lots)", but it. The accrued interest is taxable to the seller, whereas the interest that is earned from the date of purchase to the end of the year is taxable to the purchaser. 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. (ii) Amount of bond premium. 27). Since Connecticut taxes interest on out-of-state bonds, the taxpayer adds back. 171–1, the amount of bond premium is $10,000 ($110,000−$100,000). municipal bonds purchased with accrued interest paid. Section 171 (a) (2). Premium reduces your OID. Tax Topic 403 - Interest Received. 171–1, the amount of bond premium is $10,000 ($110,000−$100,000). 000% Dated Date: 8/31/20 Maturity Date: 4/01/27 Issue Yield/Price: 0. ("Related" includes companies that are owned by a majority interest. of interest income. bonds will be offered and traded at a “discount. Because individual bonds and bond funds distribute income differently and treat your principal differently, there are also some differences in how that income and any capital gains are taxed. Check "I need to adjust the amount" and "Continue". For young or lower income tax payers it is probably fine to. State identification no. Reporting bond premium amortization for noncovered tax-exempt municipal bonds. It is a municipal bond that matured and the premium was more than tax exempt amount. However, part of the OID on a stripped tax-exempt bond, or a stripped coupon from such a bond, acquired after June 10, 1987 could be taxable. TTM Yield 3. Prior to amendment, subpar. The following includes answers to common questions about interest, dividends, and tax-exempt income. Fiduciary bond premiums; Legal publication costs of notices to creditors or heirs;. On June 18, 1993, the Department of the Treasury (the Treasury Department) and the IRS published comprehensive final regulations in the Federal Register (TD 8476, 58 FR 33510) on the arbitrage investment restrictions and related provisions for tax-exempt bonds under sections 103, 148, 149, and 150, and, since that time, those final regulations. B&D Interest Income State W/H. I. Click Start or Update next to Interest on 1099-INT. This amount is included in line 8. Enter your 1099-INT information, select Continue. L. 9. This amount is included in line 8. 8 billion Vanguard Tax-Exempt. S. The adjustment will reduce your amount of reportable tax-exempt interest on Form 1040, line 8b. Yes, we have an entry in Box 10 and Box 11. 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). S Treasury securities. For a taxable covered security acquired at a premium, unless you notified the payer in writing in accordance with Regulations section 1. In line 16 - (11) Bond premium, enter the amount. 15 . But, Turbo Tax is only adding the excess of tax exempt interest over bond premium on tax exempt bonds (similar to the calculation on line 2a of. Currently our investments are 33% in tax deferred accounts, 5% in Roths and >60% in taxable accounts. 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. Bond premium on Tax-Exempt Bond. The TurboTax community is the source for answers to all your questions on a range of taxes and other financial topics. The. Fund size: $31 billion. Because the interest payments on the debt instrument are qualified stated interest, the stated redemption price at maturity of the debt instrument is $100,000. Customer reply replied 3 years ago. -or-. In box 11, Bond Premium, put the amount. Marietta, GA 30060. Under Wages & Income select Interest on 1099-INT. Depending on the type of bond, the premium can be tax deductible and amortized. You can delete Schedule B using these steps: Select Tax Tools from the menu on the left. 17 . 02-17-2020 09:00 AM. 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. com. However, in the case of a taxable bond, if you have beenHow to report acquisition premium on tax exempt bonds. In Box 110 - Additional amount, right-click on the box and select List . As of November 13, 2023, the fund has assets totaling almost $16. 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. An investor who purchases this bond has a return on investment that is determined by the periodic coupon payments. State tax withheld $ $ Form . Tax Implications of Amortizable Bond Premiums Taxation of Bond Income. 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. See § 6. Under applicable tax rules, the Issuer is legally responsible for the tax-exempt status of the bonds. Tax-exempt bonds can trade at a significant discount to par when interest rates are high. For a tax-exempt covered security acquired at a premium, enter the amount of bond premium amortization allocable to. Vanguard Short-Term Tax-Exempt Bond ETF (VTES) is built to help you earn consistent, tax-exempt income. The difference is $7k and is the amount of Bond Premium for Tax Exempt Bond. However, if you acquired a tax-exempt bond at a premium, only report the net amount of tax-exempt interest on line. 52 in 2009. 00 12-Bond premium on Treasury obligations (covered lots) 0. 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. Depending on the type of bond, the premium can be tax deductible and amortized. However, OID bonds purchased in a. 22:. See Regulations section 1. Calculate the return. 0300) to get $3,225. 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. S. Reg. The tax reporting requirements outlined are not appli-cable if bonds are owned inside an IRA or other retirement plans. I can't do a manual adjustment as I'm doing a standard deduction, not itemized deduction. The following includes answers to common questions about interest, dividends, and tax-exempt income. Above those thresholds, up to 85% of your benefits could be taxed. 1 Solution. C. bonds yielded tax exempt interest for federal income tax purposes, Petitioner was required to amortize the premium. 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. 00 Bond premium- Tax-exempt obligations (AMT, noncovered lots) 0. 2% bonds due 1/1/89 — Interest on Bonds E E R. Your yield is 8. My interest income is $0. You are required to report tax-exempt income on Form 1040, and may be required to report it. 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. So, much hunch is that tax-exempt interest on 1099-INT line 8 should instead be entered only on 1099-OID line 2. HOME Form 8949. I have a form 1099-INT that lists tax exempt interest on line 8 and bond premium on tax exempt bonds on line 13. 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. The same principle applies to Nominee. Capital Group veteran municipal manager Chad Rach will transition out of American Funds Tax-Exempt Bond on Oct. Treasury Obligations shows the bond premium for the year for covered U. Is the line 8 amount already "adjusted" for the line 13 amount, or is the interest I sh. *Panama Canal Bonds Specifically Exempt from Tax by U. James Comtois March 9, 2023. 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. I have $398 in total Specified Private Activity Bond Interest Dividends (Box 13 in 1099-DIV) across my investments. This entry is used to reduce taxable interest entries that carry to Schedule B. For tax-free municipal bonds, the interest is reported separately in a box labeled “Tax-exempt interest. Here's what you need to know about this type of interest and tax form. Under § 1. Bond premium on Treasury obligations $ 13 . 00 Tax-exempt obligations (covered lots) 0. 00 Market discount (noncovered lots) 0. Taxable OID, tax-exempt OID and bond premium are reported on Form 1099-OID like yours. Under Wages & Income select Interest on 1099-INT. You will receive a copy of IRS Form 1099-INT, Interest Income, for each bond you held that paid interest during the year. However, each year you must reduce your basis in the bond (and t ax-exempt interest otherwise reportable on Form 1040, line 8b) by the amortization for the year using the constant yield method. Vanguard Short-Term Tax. The IRS is interested in preventing issuers from “hedging” against the risk that interest rates will rise, and therefore issuing more bonds than necessary (overburdening the tax-exempt bond market). Tax Law § 612(b)(1), modifications increasing federal adjusted gross income include interest income on obligations of any state other. Under your last entry on line 1, put a subtotal of all interest listed on line 1. I have a form 1099-INT that lists tax exempt interest on line 8 and bond premium on tax exempt bonds on line 13. In the 1954 Code, only IRC § 103 dealt with qualification requirements for municipal bonds of all types. On January 15, 1999, C purchases for $120,000 a tax-exempt obligation maturing on January 15, 2006, with a stated principal amount of $100,000, payable at maturity. The bond has a stated principal amount of $100,000, payable at maturity on February 1, 2007, making your premium $10,000 ($110,000 - $100,000). Page 3 of 8 * This is important tax information and is being furnished to the Internal Revenue Service. (However, see Tax-Exempt Bonds and Coupons, later. 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. 42%. For bonds issued after 1984, the OID is treated as interest. When governments issue bonds, specific considerations are likely to apply to bond proceeds. Invests primarily in high-quality municipal securities. During the life of the bond, the premium amount is amortized and reduces the amount of t/e interest income received. You can do the following steps to enter your 1099-OID in TurboTax: Jump to. Deduct the Acquisition Premium ($790) from the Tax Exempt OID to get the taxable amount ($3700 - $790 = $2910). 00 interest you collected on 3/31/09 and the $83. K. See the instructions above for a tax-exempt covered security acquired at a premium. 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. Fields highlighted in yellow import into the UltraTax CS Source Data Entry application. 171–1, the amount of bond premium is $10,000 ($110,000−$100,000). - "Continue". - Market discount (noncovered lots) 0. Under your last entry on line 1, put a subtotal of all interest listed on line 1. When I enter them on page#11 on the same 1099 input form they net against each other on the 1040 line 2a and do not show up on schedule B or in any detail. Two provisions of the code eliminate this windfall. 1. R. Special Tax Bond: A type of bond that is repaid by revenues derived from taxation of a particular activity or asset. 4- Federal income tax withheld 0. Bond premium on Treasury obligations $ 13 . 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). Analyze the Fund American Funds Short-Term Tax-Exempt Bond Fund ® Class F-1 having Symbol FSTTX for type mutual-funds and perform research on other mutual funds. 8 Tax-exempt. June 14, 2017. Vanguard Tax-Exempt Bond Index (VTEB) Annual fee: 0. Is the line 8 amount already "adjusted" for the line 13 amount, or is the interest I sh. 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. In Box 88 - State, enter XX. 00 7- Foreign country or US possession: 6- Foreign tax paid: 0. For a tax-exempt obligation that is a covered security acquired on or after January 1, 2017, shows the tax-exempt OID on the obligation for the part of the year you owned it. 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. 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. U. NUVEEN INSD TAX-FREE ADVANTAGE MUN FD 1. However, in the case of a taxable bond, if you have been How to report acquisition premium on tax exempt bonds. Enter the total on line 2a of your Form 1040 or 1040-SR. 113–295, § 221(a)(29)(A), amended subpar. Subtract the bond premium amortization from your interest income from these bonds. In the left-hand navigation, click. 06 and bond premium is $1. A bond sold at par has its coupon rate equal to the prevailing interest rate in the economy. that are exempt from income tax providing these amounts are included in your Illinois base income. itonewbie. Box 12 Bond Premium on U. I also have the same issue with my 1099-INT where my bond premium (box 11) is greater than interest income (box 1). 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. to you on Form 1099 each year since you bought the bond. Box 13 Bond Premium on Tax-Exempt Bond: $64. 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 &. X Box 15 State B&D Interest Income State Box 16 State identification no. In the case of a bond (other than a bond the interest on which is excludable from gross income), the amount of the amortizable bond premium for the taxable year shall be allowed as a deduction. Till recently the taxable account and Roths had all stocks and the tax deferred had almost all bonds and a small amount of stock index funds. Note: The bond premium on a tax-exempt bond is required to be amortized on an annual basis. This has been very helpful. To determine the bond premium amortization we multiply the acquisition cost times the purchase yield ($107,485)* (. Here's what you need to know about this type of interest and tax form. S. a facility financed with tax-exempt bonds, the research agreements may result in the bonds meeting the private business use test. Both will achieve the same result. See Publication 1212 if this applies for instructions on how to calculate the taxable portion. Bond premium $ 11. Municipal bonds. 00. You have it backwards unfortunately. California Code, Revenue and Taxation Code - RTC § 24363. Tax-Exempt Bond: Cost Basis if Held Until Maturity:. Let us consider an investor that purchased a bond for $20,500. K. Click Interest on 1099-Int, click edit/add. Once information is completed, Lacerte generates an election statement with the election language and bond information. A percentage of the income is exempt from state income tax. When To File File Form 8038 by the 15th day of the 2nd calendar month after the close of the calendar quarter in which the bond was issued. 60 (the $100 of interest × the 39. The reissuance rules apply to all tax-exempt bonds from a large bond issue to a small. Tax-Exempt Interest Received by Estate or Trust. Commissioner of Revenue. Ask Your Own Tax Question. • Line 8: Tax Exempt Interest – Shows the total amount of tax-exempt interest paid to you during the calendar year by the payer. 68 of. On the 1099-INT box 13 has an amount of $ 13,833 of which all is under "Tax-exempt obligations (covered lots)". " Exempt Interest Dividends Form 1099-DIV, Box 12. Muni bond interest can also impact how your Social Security is taxed. Taxable bonds. TurboTax Online. The amortizable bond premium per month is $1 with respect to bonds D, E, and F, and is $. 6045-1 (n) (7) (ii) (A). If you are required to file a return, a negligence penalty or other. 171–2(a)(1) through (a)(4)(i)(B). However, each. State identification no. 16 . This amortized amount is not deductible in determining taxable income. 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. (2) Tax-exempt. S. However, OID bonds purchased in a. Tax-exempt and tax credit bond CUSIP no. Complete this screen as if your Tax-Exempt Dividend Income was reported in Box 8 of a 1099-INT. Municipal Bond Acquisition Premium. 07 percent, compounded annually. Below this subtotal, print “ABP Adjustment,” and the total interest you received. Most interest that you either receive or is credited to an account that you can withdraw without penalty is taxable income in the year it becomes available to you. This amortized amount is not deductible in determining taxable income. For a covered security acquired with bond premium, you must report the amount of bond premium amortization for the tax year. Taxable OID, tax-exempt OID and bond premium are reported on Form 1099-OID. Box 1 - Original issue discount. 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. For an overview of an issuer’s responsibilities in a conduit financing arrangement, see IRS Publication 5005,Your Responsibilities as a Conduit Issuer of Tax-Exempt Bonds. - Form 1099-INT box 11, and. Changes to guidance, law and procedures that affect Tax-Exempt Bonds. Is the tax-exempt OID on the federal level reported on the tax. In other words, a bond having a par value (redemp-tion value at maturity) of $1,000 would be purchased for. Level 15. The remaining discount is treated as OID on a taxable bond. 1, 2023. 1. 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. It also required that municipal bonds must meetVanguard'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. If this applies, enter the amount of the tax-exempt interest. Refer to the screenshots below. Tax software shows 6,400 on form 1040 line 2a (Exempt interest). I've posted on this in early March but still am having trouble understanding how to amortize the ABP amount on a Municipal bond. 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. 99%. In Box 88 - State, enter XX. A holder may elect to amortize bond premium on a taxable bond. Bond Age. Include in box 8 any accrued qualified stated interest on these bonds sold between interest dates (or on a payment date). 50% would drop to roughly 2. 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. They also won’t incur a capital loss at maturity since the premium. For adjustment to basis on account of amortizable bond premium, see section 1016(a)(5). The bond comes with five years until maturity and a par value of $1,000. You can see the $368 loss is not taken upon sale. Bond premium $ 12 . Since the coupon rate is paid semi-annually, it means that every six months, a coupon of $25 ($1,000 x 5/2) will. 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). This is the difference between the redemption price ($100) and the issue price that would produce a YTM of 10% (0. In 2015, less than 1% of corporate bonds, 17% of taxable municipal bonds, and 1% of US. Tax-exempt and tax credit bond CUSIP no. 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. Report the bond’s interest on Schedule B ( Form 1040A or 1040 ), line 1. 14. TIR 80-2. 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. You have it backwards unfortunately. If that option is not exercised by the issuer, taxable loan stays in place and is subject to a make-whole call – If issuer opts to issue tax exempt bonds, lender can accept or reject – If lender rejects the tax exempt bond option, it will instead pay aThe following includes answers to common questions about interest, dividends, and tax-exempt income. So this option. ) Loans of $10,000 or less between individuals who are not in the. See the instructions above for a tax-exempt covered security acquired at a premium. Clarifications would be appreciated, if I am doing this wrong. 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. First, the code declares that the amortizable bond premium deduction cannot be taken for tax-exempt bonds. Management Swap at Vanguard Ultra Short-Term Tax-Exempt; Ratings Unchanged. posted. 3% tax-equivalent yield, would offer inflation-beating returns every year—right up until. Client has CA muni bond with tax exempt interest but also a bond premium reported in box 13. For taxable bonds, the adjustment will reflect on Schedule B, Part 1. How to enter an election to amortize bond premium. You must complete your federal tax return, Form 1040/1040-SR, through the federal adjusted gross income (AGI) line before. I also have the same issue with my 1099-INT where my bond premium (box 11) is greater than interest income (box 1). The IRS says: "For bonds issued after September 27, 1985, you must amortize bond premium using a constant yield method on the basis of the bond's yield to maturity, determined by using the bond's basis and compounding at the close of each accrual period. Adjustments can be entered in Adjustments, Screen 40. bond that is treated as tax-exempt interest to the discount that produces a yield to maturity equal to the coupon rate of interest on (or, at the purchaser’s election, the original yield to maturity of) the whole tax-exempt bond. Savers are allowed to buy up to $5,000 of I Bonds directly if they're receiving a tax refund when they file their 2022 tax returns. Subtract the bond premium amortization from your interest income from these bonds. Bond Premium on Tax-Exempt Bond. For a covered security acquired with bond premium, you must report the amount of bond premium amortization for the tax year. tax-exempt interest received during the year over the amortized bond premium for the year). What are non – taxable bonds? Nontaxable bonds, or municipal bonds, are issued by state and local governments. The amount entered as municipal bonds correctly gets asdded back on the NYS return on line 20. See § 1. 01 Overview 1 1. 16 . C has not previously elected to amortize bond premium, but does so for 2002.