A Specified Private Activity Bond is issued to encourage private-sector investment in the development of certain facilities that serve specified public purposes, Included are exempt interest dividends paid by mutual funds that are attributable to like activities. Interest from private activity bonds generally is not taxable, however interest from specified private activity bonds issued after August 7. 1986 must be added as an adjustment to income for AMT purposes.
On Form 1099-INT, specified private activity bond interest is reported in Box 9. In TaxSlayer ProWeb, to enter it in the tax return (Form 1040) select:
- Federal Section
- 1099-INT, DIV, OID
- Interest or Dividend Income
- Click the "Interest Income" button, then Continue
- Enter the payer's name as shown on Form 1099-INT (no other payer info is required).
- For a MFJ return, indicate if the Form 1099-INT is for the taxpayer, spouse, or joint.
- Enter the Box 9 amount in the Specified Private Activity Bond field
The private activity bond interest amount will carry to Form 6251 as an adjustment to the taxpayer's income for alternative minimum tax purposes.
Note: This is a guide on entering Private Activity Bond Interest in the TaxSlayer ProWeb program. This is not intended as tax advice.