I had $24K of interest income of which $22K was tax exempt on one of y
1099-Int forms.. $332 is recorded as investment expense. I know that expenses incurred in production of tax exempt interest is not deductible. Turbo Tax doesn't seem to have any kind of proration guidance for this situation. I'd like to keep the 1099-int page exactly as sent to me, but could manually override the Schedule A summary value for all my investment expenses, subtracting the amount I calculate by prorating.I realize the amount that I would be able to deduct by prorating in this instance is probably what most accountants would consider not worth bothering with... about $30, give or take.... but since Turbo Tax is pulling in the deduction directly from the 1099Int, the Schedule A deduction will be quite overstated if I don't do something. I'd be interested if my approach to this is correct in case I encounter it in the future or if I have misunderstood something fundamental. It seems more than a little odd that Turbo Tax doesn't address this issue directly.
Thanks for your feedback.