Accrued interest


I paid accrued interest on a bond in 2009. The company went bankrupt and I was able to sell the bonds, but never got the interest payment. Therefore, my total accrued interest paid in 2009 exceeds my total interest received in 2009 (I had accrued and paid interest on other bonds also). My question is can I deduct the accrued interest paid on the bankrupt bond and where? I am assuming I cannot show a total negative amount on my Schedule B.
I know this is probably up for interpretation, but I am guessing I can deduct the accrued interest on the Schedule B up to the amount I had interest paid. However, won't this look odd?
--
>
>
 Click to see the full signature
Reply to
Michael Cortese

After looking around some more, it seems like if the accrued interest was paid in a tax year other than the year the interest payment occurs, the interest should be deducted from the basis of the bond rather than deducted as accrued interest. Is that correct?
--
>
>
 Click to see the full signature
Reply to
Michael Cortese

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.