I received a 1099-MISC for Income that was due to a municiple bond I owned that when bankrupt. Is this incomed taxable?

I assume this is a liquidating distribution, that this is all you are going to receive going forward.

I'm not sure why the income would be reported on a Form 1099-MISC as opposed to a Form 1099-B that would normally be used to report the sale or liquidation of an investment. You should be able to deduct the cost of the investment against any proceeds associated with its sale or liquidation. If you haven't already done so by writing off the investment as a capital loss on your tax return, you can apply the proceeds to the cost of the investment and report it as a sale of stocks or bonds. If you do this, you should report the Form 1099-MISC, then enter an adjustment to remove the income reported. This is because the IRS will look for the Form 1099-Misc on your tax return.

You report the Form 1099-Misc in the Other Common Income section of TurboTax, then Income from Form 1099-Misc. Once reported, you can remove the income by entering a negative adjustment to Other Income on your tax return:

  You can make that adjusting entry in TurboTax as follows:

1. From the Federal menu in TurboTax find Wages and Income 

2. Find Less Common Income

3. Choose Miscellaneous Income, 1099-A, 1099-C

4. Choose Other Reportable Income

5. Enter a description of the income and the adjustment as a negative number

You would report the liquidation of the bond in the Investment Income section of TurboTax, then Stocks, Mutual Funds, Bonds, Cryptocurrency, Bonds, etc... Enter what you paid for the bond as the cost and the amount listed on the Form 1099-Misc as the sale proceeds.