How "exact" do I have to be?

Input them as separate 1099's.

Okay, I can do that. At this time I have 7 1099INTs from Fidelity accounts and call them FID/(last three digits of the account number), or FID/060. Is it reasonable to add /(C, T, M), or FID/060/C if they are corporate, treasuries, or municiple bonds? Will the IRS be able to figure the system out, or should I explain somehow? Or is there a better labeling system?

I went to try that and found it didn't work on the first one. I had no corporate bond interest in 2008, but I had corporate accrued interest. Must have bought it at the end of the year before it declared an interest payment, but with accrued interest.

So, I would have to enter a negative number, but Taxcut won't let me enter an INT with a negative number.

In this situation you do not put the negative interest on your return until 2009.

It works as follows:

When you buy the bond, the interest you pay the seller is added to your basis. Then, when you receive the next coupon payment (or you sell the bond, if that happens first), it is subtracted back off your basis and you recognize it as negative interest income.

Steve

Incorporate the accrued interest into your 2009 return.

Your labeling system is fine. Just be sure of one thing: that the sum of the interest (Box 1) matches what's on the 1099-INT.

I wrote,

For the sake of completion here is the relevant description from Pub 550, Page 11:

If you buy a bond between interest payment dates, part of the purchase price represents interest accrued before the date of purchase. When that interest is paid to you, treat it as a return of your capital investment, rather than interest income, by reducing your basis in the bond.

There is a further discussion on Page 19, most of the way down the first column on that page.

The wording is a little tricky so I could be misinterpreting this, but that is how I read it.

Steve (not a tax pro etc.)