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Irs Amended Tax Return

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Irs Amended Tax Return

Irs amended tax return Index Symbols 10% owners, Ten-percent owners. Irs amended tax return 501(c) organizations, Foreign Governments and Certain Other Foreign Organizations 80/20 company, Dividends paid by a domestic corporation (an existing 80/20 company). Irs amended tax return A Acceptance agent, Unexpected payment. Irs amended tax return Accounts, offshore, Offshore accounts. Irs amended tax return Alien Illegal, Illegal aliens. Irs amended tax return Nonresident, Nonresident alien. Irs amended tax return Resident, Resident alien. Irs amended tax return Alimony, Pensions, Annuities, and Alimony (Income Code 14), Alimony payments. Irs amended tax return Allocation information, Failure to provide allocation information. Irs amended tax return American Samoa, U. Irs amended tax return S. Irs amended tax return Virgin Islands and American Samoa corporations. Irs amended tax return Amount to withhold, Determination of amount to withhold. Irs amended tax return Annuities, Pensions, Annuities, and Alimony (Income Code 14), Pensions and annuities. Irs amended tax return Artists and athletes Earnings of, Artists and Athletes (Income Codes 42 and 43) Special events and promotions, Artists and Athletes (Income Codes 42 and 43) Assistance (see Tax help) Awards, Other Grants, Prizes, and Awards B Backup withholding, Withholding and Reporting Obligations, Primary NRA and Form 1099 responsibility assumed. Irs amended tax return Banks, interest received by, Banks. Irs amended tax return Beneficial owner, Beneficial Owners Bonds sold between interest dates, Sales of bonds between interest dates. Irs amended tax return Branch profits tax, Corporation subject to branch profits tax. Irs amended tax return C Canada, Exception 3. Irs amended tax return , Deposit interest paid to nonresident alien individuals in 2012. Irs amended tax return , Deposit interest paid to certain nonresident alien individuals in 2013. Irs amended tax return Capital gains, Capital gains (Income Code 9). Irs amended tax return Central withholding agreements, Income Code 43. Irs amended tax return Consent dividends, Consent dividends. Irs amended tax return , Consent dividends. Irs amended tax return Contingent interest, Contingent interest. Irs amended tax return Controlled foreign corporations, interest paid to, Controlled foreign corporations. Irs amended tax return Controlling foreign corporations, Interest paid to controlling foreign corporations (Income Code 3). Irs amended tax return Covenant not to compete, Covenant not to compete. Irs amended tax return Crew members, Crew members. Irs amended tax return D Dependent personal services, Pay for dependent personal services (Income Code 17). Irs amended tax return Allowance for personal exemptions, Withholding exemptions. Irs amended tax return Defined, Pay for dependent personal services (Income Code 17). Irs amended tax return Exempt from withholding, Graduated rates. Irs amended tax return Depositing taxes How to, Depositing Withheld Taxes When to, When Deposits Are Required Deposits, Interest on deposits (Income Code 29). Irs amended tax return Disregarded entities, Disregarded entities. Irs amended tax return Dividends Direct dividend rate, Dividends qualifying for direct dividend rate (Income Code 7). Irs amended tax return Domestic corporation, Dividends paid by a domestic corporation (an existing 80/20 company). Irs amended tax return Foreign corporations, Dividends paid by foreign corporations (Income Code 8). Irs amended tax return In general, Dividends Documentary evidence, Documentary evidence. Irs amended tax return , Documentary Evidence, Documentary evidence. Irs amended tax return Documentation From foreign beneficial owners and U. Irs amended tax return S. Irs amended tax return payees, Documentation From foreign intermediaries and foreign flow-through entities, Foreign Intermediaries and Foreign Flow-Through Entities Presumptions in the absence of, Presumption Rules Qualified intermediaries, Documentation. Irs amended tax return E Effectively connected income, Effectively Connected Income Defined, Effectively Connected Income Foreign partners, Partnership Withholding on Effectively Connected Income EFTPS, Electronic deposit requirement. Irs amended tax return Electronic deposit rules, Electronic deposit requirement. Irs amended tax return Employees, Employees. Irs amended tax return , Employee. Irs amended tax return Employer, Employer. Irs amended tax return F Federal unemployment tax, Federal unemployment tax (FUTA). Irs amended tax return Fellowship grants, Scholarships and Fellowship Grants (Income Code 15) Fellowship income, Scholarships, fellowships, and grants. Irs amended tax return Financial institutions, Branches of financial institutions. Irs amended tax return FIRPTA withholding, U. Irs amended tax return S. Irs amended tax return real property interest. Irs amended tax return , U. Irs amended tax return S. Irs amended tax return Real Property Interest Fiscally transparent entity, Fiscally transparent entity. Irs amended tax return Fixed or determinable annual or periodic income, Fixed or Determinable Annual or Periodical Income (FDAP) Flow-through entities, Flow-Through Entities, Nonqualified Intermediaries Foreign, Foreign partner. Irs amended tax return 501(c) organizations, Foreign Governments and Certain Other Foreign Organizations Bank, U. Irs amended tax return S. Irs amended tax return branches of foreign banks and foreign insurance companies. Irs amended tax return , Income paid to U. Irs amended tax return S. Irs amended tax return branch of foreign bank or insurance company. Irs amended tax return Charitable organizations, Other foreign organizations, associations, and charitable institutions. Irs amended tax return Corporations, Foreign corporations. Irs amended tax return Governments, Foreign Governments and Certain Other Foreign Organizations Insurance company, U. Irs amended tax return S. Irs amended tax return branches of foreign banks and foreign insurance companies. Irs amended tax return , Income paid to U. Irs amended tax return S. Irs amended tax return branch of foreign bank or insurance company. Irs amended tax return Intermediary, Foreign Intermediaries Organizations and associations, Other foreign organizations, associations, and charitable institutions. Irs amended tax return Partner, Who Must Withhold Partnerships, nonwithholding, Foreign partnerships. Irs amended tax return Person, Foreign Persons Private foundation, Foreign private foundations. Irs amended tax return , Foreign Governments and Certain Other Foreign Organizations Status, Establishment of foreign status. Irs amended tax return Trusts, Foreign simple and grantor trust. Irs amended tax return Form 1042, Withholding and Reporting Obligations, Form 1042 filing. Irs amended tax return , Responsibilities of WT. Irs amended tax return , Form 1042. Irs amended tax return 1042-S, Withholding and Reporting Obligations, Form 1042-S reporting. Irs amended tax return , Form 1042-S reporting. Irs amended tax return , Form 1042 filing. Irs amended tax return , Form 1042-S. Irs amended tax return 1099, Withholding and Reporting Obligations, Primary NRA and Form 1099 responsibility assumed. Irs amended tax return 1099-S, Form 1099-S, Proceeds From Real Estate Transactions. Irs amended tax return 4419, Electronic reporting. Irs amended tax return 7004, Extension to file Form 1042. Irs amended tax return 8233, Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. Irs amended tax return 8288, Reporting and Paying the Tax, Form 8288, U. Irs amended tax return S. Irs amended tax return Withholding Tax Return for Dispositions by Foreign Persons of U. Irs amended tax return S. Irs amended tax return Real Property Interests. Irs amended tax return 8288-A, Reporting and Paying the Tax, Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U. Irs amended tax return S. Irs amended tax return Real Property Interests. Irs amended tax return 8288-B, Categories (1), (2), and (3). Irs amended tax return 8804, Form 8804, Annual Return for Partnership Withholding Tax (Section 1446). Irs amended tax return 8805, Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax. Irs amended tax return 8813, Form 8813, Partnership Withholding Tax Payment Voucher (Section 1446). Irs amended tax return 8833, Claiming treaty benefits. Irs amended tax return 940, Federal unemployment tax (FUTA). Irs amended tax return 941, Reporting requirements for wages and withheld taxes paid to nonresident aliens. Irs amended tax return 972, Consent dividends. Irs amended tax return SS-4, U. Irs amended tax return S. Irs amended tax return Taxpayer Identification Numbers SS-5, U. Irs amended tax return S. Irs amended tax return Taxpayer Identification Numbers W-2, Reporting requirements for wages and withheld taxes paid to nonresident aliens. Irs amended tax return , Form W-2. Irs amended tax return W-4, Alternate withholding procedure. Irs amended tax return , Form W-4, Employee's Withholding Allowance Certificate. Irs amended tax return , Withholding exemptions. Irs amended tax return , Special instructions for Form W-4. Irs amended tax return W-7, U. Irs amended tax return S. Irs amended tax return Taxpayer Identification Numbers W-8BEN, Beneficial Owners W-8ECI, Documentary evidence. Irs amended tax return W-8EXP, Form W-8ECI, Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States. Irs amended tax return W-8IMY, Foreign Intermediaries and Foreign Flow-Through Entities W-9, U. Irs amended tax return S. Irs amended tax return Taxpayer Identification Numbers Free tax services, How To Get Tax Help FUTA, Federal unemployment tax (FUTA). Irs amended tax return G Gambling winnings, Gambling winnings (Income Code 28). Irs amended tax return Graduated rates, Graduated rates. Irs amended tax return Graduated withholding, Wages Paid to Employees— Graduated Withholding Grant income, Scholarships, fellowships, and grants. Irs amended tax return Grants, Scholarships and Fellowship Grants (Income Code 15), Other Grants, Prizes, and Awards Green card test, Resident alien. Irs amended tax return Guam, Guam or Northern Mariana Islands corporations. Irs amended tax return H Help (see Tax help) I Identification number, taxpayer, U. Irs amended tax return S. Irs amended tax return Taxpayer Identification Numbers, Identification numbers. Irs amended tax return Illegal aliens, Illegal aliens. Irs amended tax return Important reminders, Reminders Income Fixed or determinable annual or periodical, Fixed or Determinable Annual or Periodical Income (FDAP) Interest, Interest Notional principal contract, Notional principal contract income. Irs amended tax return Other than effectively connected, Income Not Effectively Connected Personal service, Personal service income. Irs amended tax return Source of, Source of Income Transportation, Transportation income. Irs amended tax return Income code 01, Interest paid by U. Irs amended tax return S. Irs amended tax return obligors—general (Income Code 1). Irs amended tax return 02, Interest on real property mortgages (Income Code 2). Irs amended tax return 03, Interest paid to controlling foreign corporations (Income Code 3). Irs amended tax return 04, Interest paid by foreign corporations (Income Code 4). Irs amended tax return 06, Dividends paid by U. Irs amended tax return S. Irs amended tax return corporations — general (Income Code 6). Irs amended tax return 07, Dividends qualifying for direct dividend rate (Income Code 7). Irs amended tax return 08, Dividends paid by foreign corporations (Income Code 8). Irs amended tax return 09, Capital gains (Income Code 9). Irs amended tax return 10, Industrial royalties (Income Code 10). Irs amended tax return 11, Motion picture or television copyright royalties (Income Code 11). Irs amended tax return 12, Other royalties (for example, copyright, recording, publishing) (Income Code 12). Irs amended tax return 13, Real Property Income and Natural Resources Royalties (Income Code 13) 14, Pensions, Annuities, and Alimony (Income Code 14) 15, Scholarships and Fellowship Grants (Income Code 15) 16, Pay for independent personal services (Income Code 16). Irs amended tax return 17, Pay for dependent personal services (Income Code 17). Irs amended tax return 18, Pay for teaching (Income Code 18). Irs amended tax return 19, Pay during studying and training (Income Code 19). Irs amended tax return 20, Artists and Athletes (Income Codes 42 and 43) 24, Reporting and Paying the Tax 25, Reporting and Paying the Tax 26, Reporting and Paying the Tax 27, Publicly Traded Partnerships 28, Gambling winnings (Income Code 28). Irs amended tax return 29, Interest on deposits (Income Code 29). Irs amended tax return 30, Original issue discount (Income Code 30). Irs amended tax return 50, Other income (Income Code 50). Irs amended tax return Independent personal services Defined, Pay for independent personal services (Income Code 16). Irs amended tax return Exempt from withholding, Pay for independent personal services (Income Code 16). Irs amended tax return , 30% rate. Irs amended tax return India, Students and business apprentices from India. Irs amended tax return Indirect account holders, Indirect Account Holders Installment payment, Installment payments. Irs amended tax return , Installment payments. Irs amended tax return Insurance proceeds, Insurance proceeds. Irs amended tax return Interest Contingent, Contingent interest. Irs amended tax return Controlling foreign corporations, Interest paid to controlling foreign corporations (Income Code 3). Irs amended tax return Deposits, Interest on deposits (Income Code 29). Irs amended tax return Foreign business arrangements, Interest from foreign business arrangements. Irs amended tax return Foreign corporations, Interest paid by foreign corporations (Income Code 4). Irs amended tax return Income, Interest Portfolio, Portfolio interest. Irs amended tax return , Interest that does not qualify as portfolio interest. Irs amended tax return Real property mortgages, Interest on real property mortgages (Income Code 2). Irs amended tax return Intermediary Foreign, Foreign Intermediaries Nonqualified, Nonqualified intermediary. Irs amended tax return Qualified, Qualified intermediary. Irs amended tax return , Qualified Intermediaries International organizations, Foreign Governments and Certain Other Foreign Organizations ITIN, U. Irs amended tax return S. Irs amended tax return Taxpayer Identification Numbers K Knowledge, standards of, Standards of Knowledge L Liability of withholding agent, Liability for tax. Irs amended tax return M Magnetic media reporting, Electronic reporting. Irs amended tax return Marketable securities, Marketable securities. Irs amended tax return Mexico, Exception 3. Irs amended tax return Missing children, Reminders More information (see Tax help) Mortgages, Interest on real property mortgages (Income Code 2). Irs amended tax return N Non-registered obligations, Obligations not in registered form. Irs amended tax return Nonqualified intermediary, Nonqualified intermediary. Irs amended tax return , Nonqualified Intermediaries Nonresident alien Defined, Nonresident alien. Irs amended tax return Married to U. Irs amended tax return S. Irs amended tax return citizen or resident, Married to U. Irs amended tax return S. Irs amended tax return citizen or resident alien. Irs amended tax return Nonwage pay, Pay that is not wages. Irs amended tax return Northern Mariana Islands, Guam or Northern Mariana Islands corporations. Irs amended tax return Notional principal contract income, Notional principal contract income. Irs amended tax return NRA withholding In general, Withholding of Tax Income subject to, Income Subject to NRA Withholding Persons subject to, Persons Subject to NRA Withholding O Obligations Registered, Obligations in registered form. Irs amended tax return Obligations: Not in registered form, Obligations not in registered form. Irs amended tax return Offshore accounts, Offshore accounts. Irs amended tax return Original issue discount, Original issue discount (Income Code 30). Irs amended tax return Overwithholding, adjustment for, Adjustment for Overwithholding P Partner, Foreign partner. Irs amended tax return Partner, foreign, Who Must Withhold Partnerships Effectively connected income of foreign partners, Partnership Withholding on Effectively Connected Income Foreign, Foreign partnerships. Irs amended tax return Publicly traded, Publicly Traded Partnerships Smaller, Smaller partnerships and trusts. Irs amended tax return , Smaller partnerships and trusts. Irs amended tax return , Smaller partnerships and trusts. Irs amended tax return Withholding foreign, Withholding foreign partnership and foreign trust. Irs amended tax return , Withholding Foreign Partnerships Pay for personal services Artists and athletes, Artists and Athletes (Income Codes 42 and 43) Dependent personal services, Pay for dependent personal services (Income Code 17). Irs amended tax return Employees, Wages Paid to Employees— Graduated Withholding Exempt from withholding, Pay for Personal Services Performed Independent personal services, Pay for independent personal services (Income Code 16). Irs amended tax return Salaries and wages, Wages Paid to Employees— Graduated Withholding Scholarship or fellowship recipient, Pay for services rendered. Irs amended tax return Studying, Pay during studying and training (Income Code 19). Irs amended tax return Teaching, Pay for teaching (Income Code 18). Irs amended tax return Training, Pay during studying and training (Income Code 19). Irs amended tax return Payee, Identifying the Payee Penalties Deposit, Penalty for failure to make deposits on time. Irs amended tax return Form 1042, Penalties Form 8804, Penalties. Irs amended tax return Form 8805, Penalties. Irs amended tax return Magnetic media, Failure to file electronically. Irs amended tax return Trust fund recovery, Trust fund recovery penalty. Irs amended tax return Pensions, Pension payments. Irs amended tax return , Pensions, Annuities, and Alimony (Income Code 14), Pensions and annuities. Irs amended tax return Per diem, Per diem paid by the U. Irs amended tax return S. Irs amended tax return Government. Irs amended tax return Personal service income, Personal service income. Irs amended tax return Pooled withholding information, Pooled withholding information. Irs amended tax return Portfolio interest, Portfolio interest. Irs amended tax return , Interest that does not qualify as portfolio interest. Irs amended tax return Presumption Corporation, Presumption Rules Individual, Presumption Rules Partnership, Presumption Rules Rules, Presumption Rules Trust, Presumption Rules Private foundation, foreign, Foreign private foundations. Irs amended tax return Prizes, Other Grants, Prizes, and Awards Publications (see Tax help) Puerto Rico, Resident of a U. Irs amended tax return S. Irs amended tax return possession. Irs amended tax return , Exception 4. Irs amended tax return Q QI withholding agreement, QI withholding agreement. Irs amended tax return Qualified intermediary, Qualified intermediary. Irs amended tax return , Qualified Intermediaries Qualified investment entity (QIE) Distributions paid by, Qualified investment entities. Irs amended tax return Dividends paid by, Dividends paid by U. Irs amended tax return S. Irs amended tax return corporations — general (Income Code 6). Irs amended tax return R Racing purses, Racing purses. Irs amended tax return Real property interest Disposition of, U. Irs amended tax return S. Irs amended tax return Real Property Interest Withholding certificates, Withholding Certificates Reason to know, Reason To Know Refund procedures Qualified intermediaries, Collective refund procedures. Irs amended tax return Registered obligations, Obligations in registered form. Irs amended tax return Researchers, Tax treaties. Irs amended tax return Resident alien defined, Resident alien. Irs amended tax return Returns required, Returns Required Royalties, Royalties, Real Property Income and Natural Resources Royalties (Income Code 13) Ryukyu Islands, Income from U. Irs amended tax return S. Irs amended tax return Savings Bonds of residents of the Ryukyu Islands or the Trust Territory of the Pacific Islands. Irs amended tax return S Salaries, Wages Paid to Employees— Graduated Withholding Saving clause, Nonresident alien who becomes a resident alien. Irs amended tax return Scholarship, Scholarships, fellowships, and grants. Irs amended tax return , Scholarships and Fellowship Grants (Income Code 15) Securities, Marketable securities. Irs amended tax return , Income from securities. Irs amended tax return Services performed outside the U. Irs amended tax return S. Irs amended tax return , Services performed outside the United States. Irs amended tax return Short-term obligation, Short-term obligations. Irs amended tax return Social security, Social security and Medicare tax. Irs amended tax return Source of income, Source of Income Standards of knowledge, Standards of Knowledge Substantial presence test, Resident alien. Irs amended tax return T Tax Reporting and paying, Reporting and Paying the Tax Tax help, How To Get Tax Help Tax treaties Claiming benefits, Claiming treaty benefits. Irs amended tax return Dependent personal services, Tax treaties. Irs amended tax return Entertainers and athletes, Tax treaties. Irs amended tax return Gains, Tax treaties. Irs amended tax return Gambling winnings, Tax treaties. Irs amended tax return Independent personal services, Tax treaties. Irs amended tax return Student, Tax treaties. Irs amended tax return Students and trainees, Tax treaties. Irs amended tax return Tables, Tax Treaty Tables Teaching, Tax treaties. Irs amended tax return Tax-exempt entities, Foreign Governments and Certain Other Foreign Organizations Taxpayer Advocate, Taxpayer Advocate Service. Irs amended tax return Taxpayer identification number (TIN), U. Irs amended tax return S. Irs amended tax return Taxpayer Identification Numbers, Identification numbers. Irs amended tax return Exceptions, Exceptions to TIN requirement. Irs amended tax return Teachers, Pay for teaching (Income Code 18). Irs amended tax return Ten-percent owners, Ten-percent owners. Irs amended tax return Territorial limits, Territorial limits. Irs amended tax return Totalization agreements, Social security and Medicare tax. Irs amended tax return Transportation income, Transportation income. Irs amended tax return Travel expenses, Travel expenses. Irs amended tax return Trust Territory of the Pacific Islands, Income from U. Irs amended tax return S. Irs amended tax return Savings Bonds of residents of the Ryukyu Islands or the Trust Territory of the Pacific Islands. Irs amended tax return Trusts Foreign, Foreign simple and grantor trust. Irs amended tax return Smaller, Smaller partnerships and trusts. Irs amended tax return Withholding foreign, Withholding foreign partnership and foreign trust. Irs amended tax return , Withholding Foreign Trusts TTY/TDD information, How To Get Tax Help U U. Irs amended tax return S. Irs amended tax return agent of foreign person, U. Irs amended tax return S. Irs amended tax return agent of foreign person. Irs amended tax return U. Irs amended tax return S. Irs amended tax return branch Foreign bank, U. Irs amended tax return S. Irs amended tax return branches of foreign banks and foreign insurance companies. Irs amended tax return , Income paid to U. Irs amended tax return S. Irs amended tax return branch of foreign bank or insurance company. Irs amended tax return Foreign insurance company, U. Irs amended tax return S. Irs amended tax return branches of foreign banks and foreign insurance companies. Irs amended tax return , Income paid to U. Irs amended tax return S. Irs amended tax return branch of foreign bank or insurance company. Irs amended tax return Foreign person, U. Irs amended tax return S. Irs amended tax return branches of foreign persons. Irs amended tax return U. Irs amended tax return S. Irs amended tax return national, 30% rate. Irs amended tax return U. Irs amended tax return S. Irs amended tax return real property interest, U. Irs amended tax return S. Irs amended tax return real property interest. Irs amended tax return U. Irs amended tax return S. Irs amended tax return savings bonds, Income from U. Irs amended tax return S. Irs amended tax return Savings Bonds of residents of the Ryukyu Islands or the Trust Territory of the Pacific Islands. Irs amended tax return U. Irs amended tax return S. Irs amended tax return territorial limits, Territorial limits. Irs amended tax return U. Irs amended tax return S. Irs amended tax return Virgin Islands, U. Irs amended tax return S. Irs amended tax return Virgin Islands and American Samoa corporations. Irs amended tax return Unexpected payment, Unexpected payment. Irs amended tax return W Wages Paid to employees, Wages Paid to Employees— Graduated Withholding Pay that is not, Pay that is not wages. Irs amended tax return When to withhold, When to withhold. Irs amended tax return Withhold, amount to, Determination of amount to withhold. Irs amended tax return Withhold, when to, When to withhold. Irs amended tax return Withholding Agreements, QI withholding agreement. Irs amended tax return , WP and WT withholding agreements. Irs amended tax return , Withholding agreements. Irs amended tax return , Income Code 43. Irs amended tax return Alternative procedure, Alternative procedure. Irs amended tax return Certificate, Withholding Certificates, Withholding certificate. Irs amended tax return Rate pool, Pooled withholding information. Irs amended tax return Real property, U. Irs amended tax return S. Irs amended tax return Real Property Interest Withholding agent Defined, Withholding Agent Liability, Liability for tax. Irs amended tax return Returns required, Returns Required Tax deposit requirements, Depositing Withheld Taxes Withholding exemptions and reductions Dependent personal services, Graduated rates. Irs amended tax return Exemption, Withholding exemption. Irs amended tax return Final payment exemption, Final payment exemption. Irs amended tax return Foreign governments, Foreign Governments and Certain Other Foreign Organizations International organizations, Foreign Governments and Certain Other Foreign Organizations Real property interest, Withholding Certificates Researchers, Tax treaties. Irs amended tax return Scholarships and fellowship grants, Alternate withholding procedure. Irs amended tax return Students, Tax treaties. Irs amended tax return Withholding agreements, Withholding agreements. Irs amended tax return , Income Code 43. Irs amended tax return Prev  Up     Home   More Online Publications
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The Irs Amended Tax Return

Irs amended tax return Publication 1212 - Main Content Table of Contents Definitions Debt Instruments on the OID List Debt Instruments Not on the OID List Information for Brokers and Other MiddlemenShort-Term Obligations Redeemed at Maturity Long-Term Debt Instruments Certificates of Deposit Bearer Bonds and Coupons Backup Withholding Information for Owners of OID Debt InstrumentsExceptions. Irs amended tax return Adjustment for premium. Irs amended tax return Adjustment for acquisition premium. Irs amended tax return Adjustment for market discount. Irs amended tax return Form 1099-OID How To Report OID Figuring OID on Long-Term Debt Instruments Figuring OID on Stripped Bonds and Coupons How To Get Tax HelpLow Income Taxpayer Clinics Definitions The following terms are used throughout this publication. Irs amended tax return “Original issue discount” is defined first. Irs amended tax return The other terms are listed alphabetically. Irs amended tax return Original issue discount (OID). Irs amended tax return   OID is a form of interest. Irs amended tax return It is the excess of a debt instrument's stated redemption price at maturity over its issue price (acquisition price for a stripped bond or coupon). Irs amended tax return Zero coupon bonds and debt instruments that pay no stated interest until maturity are examples of debt instruments that have OID. Irs amended tax return Accrual period. Irs amended tax return   An accrual period is an interval of time used to measure OID. Irs amended tax return The length of an accrual period can be 6 months, a year, or some other period, depending on when the debt instrument was issued. Irs amended tax return Acquisition premium. Irs amended tax return   Acquisition premium is the excess of a debt instrument's adjusted basis immediately after purchase, including purchase at original issue, over the debt instrument's adjusted issue price at that time. Irs amended tax return A debt instrument does not have acquisition premium, however, if the debt instrument was purchased at a premium. Irs amended tax return See Premium, later. Irs amended tax return Adjusted issue price. Irs amended tax return   The adjusted issue price of a debt instrument at the beginning of an accrual period is used to figure the OID allocable to that period. Irs amended tax return In general, the adjusted issue price at the beginning of the debt instrument's first accrual period is its issue price. Irs amended tax return The adjusted issue price at the beginning of any subsequent accrual period is the sum of the issue price and all the OID includible in income before that accrual period minus any payment previously made on the debt instrument, other than a payment of qualified stated interest. Irs amended tax return Debt instrument. Irs amended tax return   The term “debt instrument” means any instrument or contractual arrangement that constitutes indebtedness under general principles of federal income tax law (including, for example, a bond, debenture, note, certificate, or other evidence of indebtedness). Irs amended tax return It generally does not include an annuity contract. Irs amended tax return Issue price. Irs amended tax return   For debt instruments listed in Section I-A and Section I-B, the issue price generally is the initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of these instruments was sold. Irs amended tax return Market discount. Irs amended tax return   Market discount arises when a debt instrument purchased in the secondary market has decreased in value since its issue date, generally because of an increase in interest rates. Irs amended tax return An OID debt instrument has market discount if your adjusted basis in the debt instrument immediately after you acquired it (usually its purchase price) was less than the debt instrument's issue price plus the total OID that accrued before you acquired it. Irs amended tax return The market discount is the difference between the issue price plus accrued OID and your adjusted basis. Irs amended tax return Premium. Irs amended tax return   A debt instrument is purchased at a premium if its adjusted basis immediately after purchase is greater than the total of all amounts payable on the debt instrument after the purchase date, other than qualified stated interest. Irs amended tax return The premium is the excess of the adjusted basis over the payable amounts. Irs amended tax return See Publication 550 for information on the tax treatment of bond premium. Irs amended tax return Qualified stated interest. Irs amended tax return   In general, qualified stated interest is stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually over the term of the debt instrument at a single fixed rate. Irs amended tax return Stated redemption price at maturity. Irs amended tax return   A debt instrument's stated redemption price at maturity is the sum of all amounts (principal and interest) payable on the debt instrument other than qualified stated interest. Irs amended tax return Yield to maturity (YTM). Irs amended tax return   In general, the YTM is the discount rate that, when used in figuring the present value of all principal and interest payments, produces an amount equal to the issue price of the debt instrument. Irs amended tax return The YTM is generally shown on the face of the debt instrument or in the literature you receive from your broker. Irs amended tax return If you do not have this information, consult your broker, tax advisor, or the issuer. Irs amended tax return Debt Instruments on the OID List The OID list on the IRS website can be used by brokers and other middlemen to prepare information returns. Irs amended tax return If you own a listed debt instrument, you generally should not rely on the information in the OID list to determine (or compare) the OID to be reported on your tax return. Irs amended tax return The OID amounts listed are figured without reference to the price or date at which you acquired the debt instrument. Irs amended tax return For information about determining the OID to be reported on your tax return, see the instructions for figuring OID under Information for Owners of OID Debt Instruments, later. Irs amended tax return The following discussions explain what information is contained in each section of the list. Irs amended tax return Section I. Irs amended tax return   This section contains publicly offered, long-term debt instruments. Irs amended tax return Section I-A: Corporate Debt Instruments Issued Before 1985. Irs amended tax return Section I-B: Corporate Debt Instruments Issued After 1984. Irs amended tax return Section I-C: Inflation-Indexed Debt Instruments. Irs amended tax return For each publicly offered debt instrument in Section I, the list contains the following information. Irs amended tax return The name of the issuer. Irs amended tax return The Committee on Uniform Security Identification Procedures (CUSIP) number. Irs amended tax return The issue date. Irs amended tax return The maturity date. Irs amended tax return The issue price expressed as a percent of principal or of stated redemption price at maturity. Irs amended tax return The annual stated or coupon interest rate. Irs amended tax return (This rate is shown as 0. Irs amended tax return 00 if no annual interest payments are provided. Irs amended tax return ) The yield to maturity will be added to Section I-B for bonds issued after December 31, 2006. Irs amended tax return The total OID accrued up to January 1 of a calendar year. Irs amended tax return (This information is not available for every instrument. Irs amended tax return ) For long-term debt instruments issued after July 1, 1982, the daily OID for the accrual periods falling in a calendar year and a subsequent year. Irs amended tax return The total OID per $1,000 of principal or maturity value for a calendar year and a subsequent year. Irs amended tax return Section II. Irs amended tax return   This section contains stripped coupons and principal components of U. Irs amended tax return S. Irs amended tax return Treasury and Government-Sponsored Enterprise debt instruments. Irs amended tax return These stripped components are available through the Department of the Treasury's Separate Trading of Registered Interest and Principal of Securities (STRIPS) program and government-sponsored enterprises such as the Resolution Funding Corporation. Irs amended tax return This section also includes debt instruments backed by U. Irs amended tax return S. Irs amended tax return Treasury securities that represent ownership interests in those securities. Irs amended tax return   The obligations listed in Section II are arranged by maturity date. Irs amended tax return The amounts listed are the total OID for a calendar year per $1,000 of redemption price. Irs amended tax return Section III. Irs amended tax return   This section contains short-term discount obligations. Irs amended tax return Section III-A: Short-Term U. Irs amended tax return S. Irs amended tax return Treasury Bills. Irs amended tax return Section III-B: Federal Home Loan Banks. Irs amended tax return Section III-C: Federal National Mortgage Association. Irs amended tax return Section III-D: Federal Farm Credit Banks. Irs amended tax return Section III-E: Federal Home Loan Mortgage Corporation. Irs amended tax return Section III-F: Federal Agricultural Mortgage Corporation. Irs amended tax return    Information that supplements Section III-A is available on the Internet at http://www. Irs amended tax return treasurydirect. Irs amended tax return gov/tdhome. Irs amended tax return htm. Irs amended tax return   The short-term obligations listed in this section are arranged by maturity date. Irs amended tax return For each obligation, the list contains the CUSIP number, maturity date, issue date, issue price (expressed as a percent of principal), and discount to be reported as interest for a calendar year per $1,000 of redemption price. Irs amended tax return Brokers and other middlemen should rely on the issue price information in Section III only if they are unable to determine the price actually paid by the owner. Irs amended tax return Debt Instruments Not on the OID List The list of debt instruments discussed earlier does not contain the following items. Irs amended tax return U. Irs amended tax return S. Irs amended tax return savings bonds. Irs amended tax return Certificates of deposit and other face-amount certificates issued at a discount, including syndicated certificates of deposit. Irs amended tax return Obligations issued by tax-exempt organizations. Irs amended tax return OID debt instruments that matured or were entirely called by the issuer before the tables were posted on the IRS website. Irs amended tax return Mortgage-backed securities and mortgage participation certificates. Irs amended tax return Long-term OID debt instruments issued before May 28, 1969. Irs amended tax return Short-term obligations, other than the obligations listed in Section III. Irs amended tax return Debt instruments issued at a discount by states or their political subdivisions. Irs amended tax return REMIC regular interests and CDOs. Irs amended tax return Commercial paper and banker's acceptances issued at a discount. Irs amended tax return Obligations issued at a discount by individuals. Irs amended tax return Foreign obligations not traded in the United States and obligations not issued in the United States. Irs amended tax return Information for Brokers and Other Middlemen The following discussions contain specific instructions for brokers and middlemen who hold or redeem a debt instrument for the owner. Irs amended tax return In general, you must file a Form 1099 for the debt instrument if the interest or OID to be included in the owner's income for a calendar year totals $10 or more. Irs amended tax return You also must file a Form 1099 if you were required to deduct and withhold tax, even if the interest or OID is less than $10. Irs amended tax return See Backup Withholding, later. Irs amended tax return If you must file a Form 1099, furnish a copy to the owner of the debt instrument by January 31 in the year it is due. Irs amended tax return File all your Forms 1099 with the IRS, accompanied by Form 1096, by February 28 in the year it is due (March 31 if you file electronically). Irs amended tax return Electronic payee statements. Irs amended tax return   You can issue Form 1099-OID electronically with the consent of the recipient. Irs amended tax return More information. Irs amended tax return   For more information, including penalties for failure to file (or furnish) required information returns or statements, see the General Instructions for Certain Information Returns (Forms 1098, 1099, 3921, 3922, 5498, and W-2G) for the appropriate calendar year. Irs amended tax return Short-Term Obligations Redeemed at Maturity If you redeem a short-term discount obligation for the owner at maturity, you must report the discount as interest on Form 1099-INT. Irs amended tax return To figure the discount, use the purchase price shown on the owner's copy of the purchase confirmation receipt or similar record, or the price shown in your transaction records. Irs amended tax return If you sell the obligation for the owner before maturity, you must file Form 1099-B to reflect the gross proceeds to the seller. Irs amended tax return Do not report the accrued discount to the date of sale on either Form 1099-INT or Form 1099-OID. Irs amended tax return If the owner's purchase price cannot be determined, figure the discount as if the owner had purchased the obligation at its original issue price. Irs amended tax return A special rule is used to determine the original issue price for information reporting on U. Irs amended tax return S. Irs amended tax return Treasury bills (T-bills) listed in Section III-A. Irs amended tax return Under this rule, you treat as the original issue price of the T-bill the noncompetitive (weighted average of accepted auction bids) discount price for the longest-maturity T-bill maturing on the same date as the T-bill being redeemed. Irs amended tax return This noncompetitive discount price is the issue price (expressed as a percent of principal) shown in Section III-A. Irs amended tax return A similar rule is used to figure the discount on short-term discount obligations issued by the organizations listed in Section III-B through Section III-F. Irs amended tax return Example 1. Irs amended tax return There are 13-week and 26-week T-bills maturing on the same date as the T-bill being redeemed. Irs amended tax return The price actually paid by the owner cannot be established by owner or middleman records. Irs amended tax return You treat as the issue price of the T-bill the noncompetitive discount price (expressed as a percent of principal) shown in Section III-A for a 26-week bill maturing on the same date as the T-bill redeemed. Irs amended tax return The interest you report on Form 1099-INT is the OID (per $1,000 of principal) shown in Section III-A for that obligation. Irs amended tax return Long-Term Debt Instruments If you hold a long-term OID debt instrument as a nominee for the true owner, you generally must file Form 1099-OID. Irs amended tax return For this purpose, you can rely on Section I of the OID list to determine the following information. Irs amended tax return Whether a debt instrument has OID. Irs amended tax return The OID to be reported on the Form 1099-OID. Irs amended tax return In general, you must report OID on publicly offered, long-term debt instruments listed in Section I. Irs amended tax return You also can report OID on other long-term debt instruments. Irs amended tax return Form 1099-OID. Irs amended tax return   On Form 1099-OID for a calendar year show the following information. Irs amended tax return Box 1. Irs amended tax return The OID for the actual dates the owner held the debt instruments during a calendar year. Irs amended tax return To determine this amount, see Figuring OID, next. Irs amended tax return Box 2. Irs amended tax return The qualified stated interest paid or credited during the calendar year. Irs amended tax return Interest reported here is not reported on Form 1099-INT. Irs amended tax return The qualified stated interest on Treasury inflation-protected securities may be reported on Form 1099-INT in box 3 instead. Irs amended tax return Box 3. Irs amended tax return Any interest or principal forfeited because of an early withdrawal that the owner can deduct from gross income. Irs amended tax return Do not reduce the amounts in boxes 1 and 2 by the forfeiture. Irs amended tax return Box 4. Irs amended tax return Any backup withholding for this debt instrument. Irs amended tax return Box 7. Irs amended tax return The CUSIP number, if any. Irs amended tax return If there is no CUSIP number, give a description of the debt instrument, including the abbreviation for the stock exchange, the abbreviation used by the stock exchange for the issuer, the coupon rate, and the year of maturity (for example, NYSE XYZ 12. Irs amended tax return 50 2006). Irs amended tax return If the issuer of the debt instrument is other than the payer, show the name of the issuer in this box. Irs amended tax return Box 8. Irs amended tax return The OID on a U. Irs amended tax return S. Irs amended tax return Treasury obligation for the part of the year the owner held the debt instrument. Irs amended tax return Box 9. Irs amended tax return Investment expenses passed on to holders of a single-class REMIC. Irs amended tax return Boxes 10-12. Irs amended tax return Use to report any state income tax withheld for this debt instrument. Irs amended tax return Figuring OID. Irs amended tax return   You can determine the OID on a long-term debt instrument by using either of the following. Irs amended tax return Section I of the OID list. Irs amended tax return The income tax regulations. Irs amended tax return Using Section I. Irs amended tax return   If the owner held the debt instrument for the entire calendar year, report the OID shown in Section I for the calendar year. Irs amended tax return Because OID is listed for each $1,000 of stated redemption price at maturity, you must adjust the listed amount to reflect the debt instrument's actual stated redemption price at maturity. Irs amended tax return For example, if the debt instrument's stated redemption price at maturity is $500, report one-half the listed OID. Irs amended tax return   If the owner held the debt instrument for less than the entire calendar year, figure the OID to report as follows. Irs amended tax return Look up the daily OID for the first accrual period in the calendar year during which the owner held the debt instrument. Irs amended tax return Multiply the daily OID by the number of days the owner held the debt instrument during that accrual period. Irs amended tax return Repeat steps (1) and (2) for any remaining accrual periods for the year during which the owner held the debt instrument. Irs amended tax return Add the results in steps (2) and (3) to determine the owner's OID per $1,000 of stated redemption price at maturity. Irs amended tax return If necessary, adjust the OID in (4) to reflect the debt instrument's stated redemption price at maturity. Irs amended tax return Report the result on Form 1099-OID in box 1. Irs amended tax return Using the income tax regulations. Irs amended tax return   Instead of using Section I to figure OID, you can use the regulations under sections 1272 through 1275 of the Internal Revenue Code. Irs amended tax return For example, under the regulations, you can use monthly accrual periods in figuring OID for a debt instrument issued after April 3, 1994, that provides for monthly payments. Irs amended tax return (If you use Section I-B, the OID is figured using 6-month accrual periods. Irs amended tax return )   For a general explanation of the rules for figuring OID under the regulations, see Figuring OID on Long-Term Debt Instruments under Information for Owners of OID Debt Instruments, later. Irs amended tax return Certificates of Deposit If you hold a bank certificate of deposit (CD) as a nominee, you must determine whether the CD has OID and any OID includible in the income of the owner. Irs amended tax return You must file an information return showing the reportable interest and OID, if any, on the CD. Irs amended tax return These rules apply whether or not you sold the CD to the owner. Irs amended tax return Report OID on a CD in the same way as OID on other debt instruments. Irs amended tax return See Short-Term Obligations Redeemed at Maturity and Long-Term Debt Instruments, earlier. Irs amended tax return Bearer Bonds and Coupons If a coupon from a bearer bond is presented to you for collection before the bond matures, you generally must report the interest on Form 1099-INT. Irs amended tax return However, do not report the interest if either of the following apply. Irs amended tax return You hold the bond as a nominee for the true owner. Irs amended tax return The payee is a foreign person. Irs amended tax return See Payments to foreign person under Backup Withholding, later. Irs amended tax return Because you cannot assume the presenter of the coupon also owns the bond, you should not report OID on the bond on Form 1099-OID. Irs amended tax return The coupon may have been “stripped” (separated) from the bond and separately purchased. Irs amended tax return However, if a long-term bearer bond on the OID list is presented to you for redemption upon call or maturity, you should prepare a Form 1099-OID showing the OID for that calendar year, as well as any coupon interest payments collected at the time of redemption. Irs amended tax return Backup Withholding If you report OID on Form 1099-OID or interest on Form 1099-INT for a calendar year, you may be required to apply backup withholding to the reportable payment at a rate of 28%. Irs amended tax return The backup withholding is deducted at the time a cash payment is made. Irs amended tax return See Pub. Irs amended tax return 1281, Backup Withholding for Missing and Incorrect Name/TIN(s), for more information. Irs amended tax return Backup withholding generally applies in the following situations. Irs amended tax return The payee does not give you a taxpayer identification number (TIN). Irs amended tax return The IRS notifies you that the payee gave an incorrect TIN. Irs amended tax return The IRS notifies you that the payee is subject to backup withholding due to payee underreporting. Irs amended tax return For debt instruments acquired after 1983: The payee does not certify, under penalties of perjury, that he or she is not subject to backup withholding under (3), or The payee does not certify, under penalties of perjury, that the TIN given is correct. Irs amended tax return However, for short-term discount obligations (other than government obligations), bearer bonds and coupons, and U. Irs amended tax return S. Irs amended tax return savings bonds, backup withholding applies only if the payee does not give you a TIN or gives you an obviously incorrect number for a TIN. Irs amended tax return Short-term obligations. Irs amended tax return   Backup withholding applies to OID on a short-term obligation only when the OID is paid at maturity. Irs amended tax return However, backup withholding applies to any interest payable before maturity when the interest is paid or credited. Irs amended tax return   If the owner of a short-term obligation at maturity is not the original owner and can establish the purchase price of the obligation, the amount subject to backup withholding must be determined by treating the purchase price as the issue price. Irs amended tax return However, you can choose to disregard that price if it would require significant manual intervention in the computer or recordkeeping system used for the obligation. Irs amended tax return If the purchase price of a listed obligation is not established or is disregarded, you must use the issue price shown in Section III. Irs amended tax return Long-term obligations. Irs amended tax return   If no cash payments are made on a long-term obligation before maturity, backup withholding applies only at maturity. Irs amended tax return The amount subject to backup withholding is the OID includible in the owner's gross income for the calendar year when the obligation matures. Irs amended tax return The amount to be withheld is limited to the cash paid. Irs amended tax return Registered long-term obligations with cash payments. Irs amended tax return   If a registered long-term obligation has cash payments before maturity, backup withholding applies when a cash payment is made. Irs amended tax return The amount subject to backup withholding is the total of the qualified stated interest (defined earlier under Definitions) and OID includible in the owner's gross income for the calendar year when the payment is made. Irs amended tax return If more than one cash payment is made during the year, the OID subject to withholding for the year must be allocated among the expected cash payments in the ratio that each bears to the total of the expected cash payments. Irs amended tax return For any payment, the required withholding is limited to the cash paid. Irs amended tax return Payee not the original owner. Irs amended tax return   If the payee is not the original owner of the obligation, the OID subject to backup withholding is the OID includible in the gross income of all owners during the calendar year (without regard to any amount paid by the new owner at the time of transfer). Irs amended tax return The amount subject to backup withholding at maturity of a listed obligation must be determined using the issue price shown in Section I. Irs amended tax return Bearer long-term obligations with cash payments. Irs amended tax return   If a bearer long-term obligation has cash payments before maturity, backup withholding applies when the cash payments are made. Irs amended tax return For payments before maturity, the amount subject to withholding is the qualified stated interest (defined earlier under Definitions) includible in the owner's gross income for the calendar year. Irs amended tax return For a payment at maturity, the amount subject to withholding is only the total of any qualified stated interest paid at maturity and the OID includible in the owner's gross income for the calendar year when the obligation matures. Irs amended tax return The required withholding at maturity is limited to the cash paid. Irs amended tax return Sales and redemptions. Irs amended tax return   If you report the gross proceeds from a sale, exchange, or redemption of a debt instrument on Form 1099-B for a calendar year, you may be required to withhold 28% of the amount reported. Irs amended tax return Backup withholding applies in the following situations. Irs amended tax return The payee does not give you a TIN. Irs amended tax return The IRS notifies you that the payee gave an incorrect TIN. Irs amended tax return For debt instruments held in an account opened after 1983, the payee does not certify, under penalties of perjury, that the TIN given is correct. Irs amended tax return Payments outside the United States to U. Irs amended tax return S. Irs amended tax return person. Irs amended tax return   The requirements for backup withholding and information reporting apply to payments of OID and interest made outside the United States to a U. Irs amended tax return S. Irs amended tax return person, a controlled foreign corporation, or a foreign person at least 50% of whose income for the preceding 3-year period is effectively connected with the conduct of a U. Irs amended tax return S. Irs amended tax return trade or business. Irs amended tax return Payments to foreign person. Irs amended tax return   The following discussions explain the rules for backup withholding and information reporting on payments to foreign persons. Irs amended tax return U. Irs amended tax return S. Irs amended tax return -source amount. Irs amended tax return   Backup withholding and information reporting are not required for payments of U. Irs amended tax return S. Irs amended tax return -source OID, interest, or proceeds from a sale or redemption of an OID instrument if the payee has given you proof (generally the appropriate Form W-8 or an acceptable substitute) that the payee is a foreign person. Irs amended tax return A U. Irs amended tax return S. Irs amended tax return resident is not a foreign person. Irs amended tax return For proof of the payee's foreign status, you can rely on the appropriate Form W-8 or on documentary evidence for payments made outside the United States to an offshore account or, in case of broker proceeds, a sale effected outside the United States. Irs amended tax return Receipt of the appropriate Form W-8 does not relieve you from information reporting and backup withholding if you actually know the payee is a U. Irs amended tax return S. Irs amended tax return person. Irs amended tax return   For information about the 28% withholding tax that may apply to payments of U. Irs amended tax return S. Irs amended tax return -source OID or interest to foreign persons, see Publication 515. Irs amended tax return Foreign-source amount. Irs amended tax return   Backup withholding and information reporting are not required for payments of foreign-source OID and interest made outside the United States. Irs amended tax return However, if the payments are made inside the United States, the requirements for backup withholding and information reporting will apply unless the payee has given you the appropriate Form W-8 or acceptable substitute as proof that the payee is a foreign person. Irs amended tax return More information. Irs amended tax return   For more information about backup withholding and information reporting on foreign-source amounts or payments to foreign persons, see Regulations section 1. Irs amended tax return 6049-5. Irs amended tax return Information for Owners of OID Debt Instruments This section is for persons who prepare their own tax returns. Irs amended tax return It discusses the income tax rules for figuring and reporting OID on long-term debt instruments. Irs amended tax return It also includes a similar discussion for stripped bonds and coupons, such as zero coupon bonds available through the Department of the Treasury's STRIPS program and government-sponsored enterprises such as the Resolution Funding Corporation. Irs amended tax return However, the information provided does not cover every situation. Irs amended tax return More information can be found in the regulations under sections 1271 through 1275 of the Internal Revenue Code. Irs amended tax return Including OID in income. Irs amended tax return   Generally, you include OID in income as it accrues each year, whether or not you receive any payments from the debt instrument issuer. Irs amended tax return Exceptions. Irs amended tax return   The rules for including OID in income as it accrues generally do not apply to the following debt instruments. Irs amended tax return U. Irs amended tax return S. Irs amended tax return savings bonds. Irs amended tax return Tax-exempt obligations. Irs amended tax return (However, see Tax-Exempt Bonds and Coupons, later. Irs amended tax return ) Obligations issued by individuals before March 2, 1984. Irs amended tax return Loans of $10,000 or less between individuals who are not in the business of lending money. Irs amended tax return (The dollar limit includes outstanding prior loans by the lender to the borrower. Irs amended tax return ) This exception does not apply if a principal purpose of the loan is to avoid any federal tax. Irs amended tax return   See chapter 1 of Publication 550 for information about the rules for these and other types of discounted debt instruments, such as short-term and market discount obligations. Irs amended tax return Publication 550 also discusses rules for holders of REMIC interests and CDOs. Irs amended tax return De minimis rule. Irs amended tax return   You can treat OID as zero if the total OID on a debt instrument is less than one-fourth of 1% (. Irs amended tax return 0025) of the stated redemption price at maturity multiplied by the number of full years from the date of original issue to maturity. Irs amended tax return Debt instruments with de minimis OID are not listed in this publication. Irs amended tax return There are special rules to determine the de minimis amount in the case of debt instruments that provide for more than one payment of principal. Irs amended tax return Also, the de minimis rules generally do not apply to tax-exempt obligations. Irs amended tax return Example 2. Irs amended tax return You bought at issuance a 10-year debt instrument with a stated redemption price at maturity of $1,000, issued at $980 with OID of $20. Irs amended tax return One-fourth of 1% of $1,000 (the stated redemption price) times 10 (the number of full years from the date of original issue to maturity) equals $25. Irs amended tax return Under the de minimis rule, you can treat the OID as zero because the $20 discount is less than $25. Irs amended tax return Example 3. Irs amended tax return Assume the same facts as Example 2, except the debt instrument was issued at $950. Irs amended tax return You must report part of the $50 OID each year because it is more than $25. Irs amended tax return Choice to report all interest as OID. Irs amended tax return   Generally, you can choose to treat all interest on a debt instrument acquired after April 3, 1994, as OID and include it in gross income by using the constant yield method. Irs amended tax return See Constant yield method under Debt Instruments Issued After 1984, later, for more information. Irs amended tax return   For this choice, interest includes stated interest, acquisition discount, OID, de minimis OID, market discount, de minimis market discount, and unstated interest, as adjusted by any amortizable bond premium or acquisition premium. Irs amended tax return For more information, see Regulations section 1. Irs amended tax return 1272-3. Irs amended tax return Purchase after date of original issue. Irs amended tax return   A debt instrument you purchased after the date of original issue may have premium, acquisition premium, or market discount. Irs amended tax return If so, the OID reported to you on Form 1099-OID may have to be adjusted. Irs amended tax return For more information, see Showing an OID adjustment under How To Report OID, later. Irs amended tax return The following rules generally do not apply to contingent payment debt instruments. Irs amended tax return Adjustment for premium. Irs amended tax return   If your debt instrument (other than an inflation-indexed debt instrument) has premium, do not report any OID as ordinary income. Irs amended tax return Your adjustment is the total OID shown on your Form 1099-OID. Irs amended tax return Adjustment for acquisition premium. Irs amended tax return   If your debt instrument has acquisition premium, reduce the OID you report. Irs amended tax return Your adjustment is the difference between the OID shown on your Form 1099-OID and the reduced OID amount figured using the rules explained later under Figuring OID on Long-Term Debt Instruments. Irs amended tax return Adjustment for market discount. Irs amended tax return   If your debt instrument has market discount that you choose to include in income currently, increase the OID you report. Irs amended tax return Your adjustment is the accrued market discount for the year. Irs amended tax return See Market Discount Bonds in chapter 1 of Publication 550 for information on how to figure accrued market discount and include it in your income currently and for other information about market discount bonds. Irs amended tax return If you choose to use the constant yield method to figure accrued market discount, also see Figuring OID on Long-Term Debt Instruments, later. Irs amended tax return The constant yield method of figuring accrued OID, explained in those discussions under Constant yield method, is also used to figure accrued market discount. Irs amended tax return For more information concerning premium or market discount on an inflation-indexed debt instrument, see Regulations section 1. Irs amended tax return 1275-7. Irs amended tax return Sale, exchange, or redemption. Irs amended tax return   Generally, you treat your gain or loss from the sale, exchange, or redemption of a discounted debt instrument as a capital gain or loss if you held the debt instrument as a capital asset. Irs amended tax return If you sold the debt instrument through a broker, you should receive Form 1099-B or an equivalent statement from the broker. Irs amended tax return Use the Form 1099-B or other statement and your brokerage statements to complete Form 8949, and Schedule D (Form 1040). Irs amended tax return   Your gain or loss is the difference between the amount you realized on the sale, exchange, or redemption and your basis in the debt instrument. Irs amended tax return Your basis, generally, is your cost increased by the OID you have included in income each year you held it. Irs amended tax return In general, to determine your gain or loss on a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. Irs amended tax return   See chapter 4 of Publication 550 for more information about the tax treatment of the sale or redemption of discounted debt instruments. Irs amended tax return Example 4. Irs amended tax return Larry, a calendar year taxpayer, bought a corporate debt instrument at original issue for $86,235. Irs amended tax return 00 on November 1 of Year 1. Irs amended tax return The 15-year debt instrument matures on October 31 of Year 16 at a stated redemption price of $100,000. Irs amended tax return The debt instrument provides for semiannual payments of interest at 10%. Irs amended tax return Assume the debt instrument is a capital asset in Larry's hands. Irs amended tax return The debt instrument has $13,765. Irs amended tax return 00 of OID ($100,000 stated redemption price at maturity minus $86,235. Irs amended tax return 00 issue price). Irs amended tax return Larry sold the debt instrument for $90,000 on November 1 of Year 4. Irs amended tax return Including the OID he will report for the period he held the debt instrument in Year 4, Larry has included $4,556. Irs amended tax return 00 of OID in income and has increased his basis by that amount to $90,791. Irs amended tax return 00. Irs amended tax return Larry has realized a loss of $791. Irs amended tax return 00. Irs amended tax return All of Larry's loss is capital loss. Irs amended tax return Form 1099-OID The issuer of the debt instrument (or your broker, if you purchased or held the debt instrument through a broker) should give you a copy of Form 1099-OID or a similar statement if the accrued OID for the calendar year is $10 or more and the term of the debt instrument is more than 1 year. Irs amended tax return Form 1099-OID shows all OID income in box 1 except OID on a U. Irs amended tax return S. Irs amended tax return Treasury obligation, which is shown in box 8. Irs amended tax return It also shows, in box 2, any qualified stated interest you must include in income. Irs amended tax return (However, any qualified stated interest on Treasury inflation-protected securities can be reported on Form 1099-INT in box 3. Irs amended tax return ) A copy of Form 1099-OID will be sent to the IRS. Irs amended tax return Do not attach your copy to your tax return. Irs amended tax return Keep it for your records. Irs amended tax return If you are required to file a tax return and you receive Form 1099-OID showing taxable amounts, you must report these amounts on your return. Irs amended tax return A 20% accuracy-related penalty may be charged for underpayment of tax due to either negligence or disregard of rules and regulations or substantial understatement of tax. Irs amended tax return Form 1099-OID not received. Irs amended tax return   If you held an OID debt instrument for a calendar year but did not receive a Form 1099-OID, refer to the discussions under Figuring OID on Long-Term Debt Instruments, later, for information on the OID you must report. Irs amended tax return Refiguring OID. Irs amended tax return   You must refigure the OID shown on Form 1099-OID, in box 1 or box 8, to determine the proper amount to include in income if one of the following applies. Irs amended tax return You bought the debt instrument at a premium or at an acquisition premium. Irs amended tax return The debt instrument is a stripped bond or coupon (including zero coupon bonds backed by U. Irs amended tax return S. Irs amended tax return Treasury securities). Irs amended tax return The debt instrument is a contingent payment or inflation-indexed debt instrument. Irs amended tax return See the discussions under Figuring OID on Long-Term Debt Instruments or Figuring OID on Stripped Bonds and Coupons, later, for the specific computations. Irs amended tax return Refiguring interest. Irs amended tax return   If you disposed of a debt instrument or acquired it from another holder between interest dates, see the discussion under Bonds Sold Between Interest Dates in chapter 1 of Publication 550 for information about refiguring the interest shown on Form 1099-OID in box 2. Irs amended tax return Nominee. Irs amended tax return   If you are the holder of an OID debt instrument and you receive a Form 1099-OID that shows your taxpayer identification number and includes amounts belonging to another person, you are considered a “nominee. Irs amended tax return ” You must file another Form 1099-OID for each actual owner, showing the OID for the owner. Irs amended tax return Show the owner of the debt instrument as the “recipient” and you as the “payer. Irs amended tax return ”   Complete Form 1099-OID and Form 1096 and file the forms with the Internal Revenue Service Center for your area. Irs amended tax return You must also give a copy of the Form 1099-OID to the actual owner. Irs amended tax return However, you are not required to file a nominee return to show amounts belonging to your spouse. Irs amended tax return See the Form 1099 instructions for more information. Irs amended tax return   When preparing your tax return, follow the instructions under Showing an OID adjustment in the next discussion. Irs amended tax return How To Report OID Generally, you report your taxable interest and OID income on the interest line of Form 1040EZ, Form 1040A, or Form 1040. Irs amended tax return Form 1040 or Form 1040A required. Irs amended tax return   You must use Form 1040 or Form 1040A (you cannot use Form 1040EZ) under either of the following conditions. Irs amended tax return You received a Form 1099-OID as a nominee for the actual owner. Irs amended tax return Your total interest and OID income for the year was more than $1,500. Irs amended tax return Form 1040 required. Irs amended tax return   You must use Form 1040 (you cannot use Form 1040A or Form 1040EZ) if you are reporting more or less OID than the amount shown on Form 1099-OID, other than because you are a nominee. Irs amended tax return For example, if you paid a premium or an acquisition premium when you purchased the debt instrument, you must use Form 1040 because you will report less OID than shown on Form 1099-OID. Irs amended tax return Also, you must use Form 1040 if you were charged an early withdrawal penalty. Irs amended tax return Where to report. Irs amended tax return   List each payer's name (if a brokerage firm gave you a Form 1099, list the brokerage firm as the payer) and the amount received from each payer on Form 1040A, Schedule B, Part I, line 1, or Form 1040, Schedule B, line 1. Irs amended tax return Include all OID and periodic interest shown on any Form 1099-OID, boxes 1, 2, and 8, you received for the tax year. Irs amended tax return Also include any other OID and interest income for which you did not receive a Form 1099. Irs amended tax return Showing an OID adjustment. Irs amended tax return   If you use Form 1040 to report more or less OID than shown on Form 1099-OID, list the full OID on Schedule B, Part I, line 1, and follow the instructions under 1 or 2, next. Irs amended tax return   If you use Form 1040A to report the OID shown on a Form 1099-OID you received as a nominee for the actual owner, list the full OID on Schedule B, Part I, line 1 and follow the instructions under 1. Irs amended tax return If the OID, as adjusted, is less than the amount shown on Form 1099-OID, show the adjustment as follows. Irs amended tax return Under your last entry on line 1, subtotal all interest and OID income listed on line 1. Irs amended tax return Below the subtotal, write “Nominee Distribution” or “OID Adjustment” and show the OID you are not required to report. Irs amended tax return Subtract that OID from the subtotal and enter the result on line 2. Irs amended tax return If the OID, as adjusted, is more than the amount shown on Form 1099-OID, show the adjustment as follows. Irs amended tax return Under your last entry on line 1, subtotal all interest and OID income listed on line 1. Irs amended tax return Below the subtotal, write “OID Adjustment” and show the additional OID. Irs amended tax return Add that OID to the subtotal and enter the result on line 2. Irs amended tax return Figuring OID on Long-Term Debt Instruments How you figure the OID on a long-term debt instrument depends on the date it was issued. Irs amended tax return It also may depend on the type of the debt instrument. Irs amended tax return There are different rules for each of the following debt instruments. Irs amended tax return Corporate debt instruments issued after 1954 and before May 28, 1969, and government debt instruments issued after 1954 and before July 2, 1982. Irs amended tax return Corporate debt instruments issued after May 27, 1969, and before July 2, 1982. Irs amended tax return Debt instruments issued after July 1, 1982, and before 1985. Irs amended tax return Debt instruments issued after 1984 (other than debt instruments described in (5) and (6)). Irs amended tax return Contingent payment debt instruments issued after August 12, 1996. Irs amended tax return Inflation-indexed debt instruments (including Treasury inflation-protected securities) issued after January 5, 1997. Irs amended tax return Zero coupon bonds. Irs amended tax return   The rules for figuring OID on zero coupon bonds backed by U. Irs amended tax return S. Irs amended tax return Treasury securities are discussed under Figuring OID on Stripped Bonds and Coupons, later. Irs amended tax return Corporate Debt Instruments Issued After 1954 and Before May 28, 1969, and Government Debt Instruments Issued After 1954 and Before July 2, 1982 If you hold these debt instruments as capital assets, you include OID in income only in the year the debt instrument is sold, exchanged, or redeemed, and only if you have a gain. Irs amended tax return The OID, which is taxed as ordinary income, generally equals the following amount. Irs amended tax return   number of full months you held the debt instrument  number of full months from date of original issue to date of maturity X original issue discount The balance of the gain is capital gain. Irs amended tax return If there is a loss on the sale of the debt instrument, the entire loss is a capital loss and no OID is reported. Irs amended tax return Corporate Debt Instruments Issued After May 27, 1969, and Before July 2, 1982 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments. Irs amended tax return For information about showing the correct OID on your tax return, see the discussion under How To Report OID, earlier. Irs amended tax return Your basis in the debt instrument is increased by the OID you include in income. Irs amended tax return Form 1099-OID. Irs amended tax return   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. Irs amended tax return However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. Irs amended tax return See Reduction for acquisition premium, later. Irs amended tax return If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. Irs amended tax return irs. Irs amended tax return gov/pub1212 by clicking the link under Recent Developments. Irs amended tax return Form 1099-OID not received. Irs amended tax return    The OID listed is for each $1,000 of redemption price. Irs amended tax return You must adjust the listed amount if your debt instrument has a different principal amount. Irs amended tax return For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. Irs amended tax return   If you held the debt instrument the entire year, use the OID shown in Section I-A for a calendar year. Irs amended tax return (If your debt instrument is not listed in Section I-A, consult the issuer for information about the issue price and the OID that accrued for that year. Irs amended tax return ) If you did not hold the debt instrument the entire year, figure your OID using the following method. Irs amended tax return Divide the OID shown by 12. Irs amended tax return Multiply the result in (1) by the number of complete and partial months (for example, 6½ months) you held the debt instrument during a calendar year. Irs amended tax return This is the OID to include in income unless you paid an acquisition premium. Irs amended tax return The reduction for acquisition premium is discussed next. Irs amended tax return Reduction for acquisition premium. Irs amended tax return   If you bought the debt instrument at an acquisition premium, figure the OID to include in income as follows. Irs amended tax return Divide the total OID on the debt instrument by the number of complete months, and any part of a month, from the date of original issue to the maturity date. Irs amended tax return This is the monthly OID. Irs amended tax return Subtract from your cost the issue price and the accumulated OID from the date of issue to the date of purchase. Irs amended tax return (If the result is zero or less, stop here. Irs amended tax return You did not pay an acquisition premium. Irs amended tax return ) Divide the amount figured in (2) by the number of complete months, and any part of a month, from the date of your purchase to the maturity date. Irs amended tax return Subtract the amount figured in (3) from the amount figured in (1). Irs amended tax return This is the OID to include in income for each month you hold the debt instrument during the year. Irs amended tax return Transfers during the month. Irs amended tax return   If you buy or sell a debt instrument on any day other than the same day of the month as the date of original issue, the ratable monthly portion of OID for the month of sale is divided between the seller and the buyer according to the number of days each held the debt instrument. Irs amended tax return Your holding period for this purpose begins the day you acquire the debt instrument and ends the day before you dispose of it. Irs amended tax return Debt Instruments Issued After July 1, 1982, and Before 1985 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments and increase your basis by the amount included. Irs amended tax return For information about showing the correct OID on your tax return, see How To Report OID, earlier. Irs amended tax return Form 1099-OID. Irs amended tax return   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. Irs amended tax return However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. Irs amended tax return See Constant yield method and the discussions on acquisition premium that follow, later. Irs amended tax return If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. Irs amended tax return irs. Irs amended tax return gov/pub1212 by clicking the link under Recent Developments. Irs amended tax return Form 1099-OID not received. Irs amended tax return    The OID listed is for each $1,000 of redemption price. Irs amended tax return You must adjust the listed amount if your debt instrument has a different principal amount. Irs amended tax return For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. Irs amended tax return   If you held the debt instrument the entire year, use the OID shown in Section I-A. Irs amended tax return (If your instrument is not listed in Section I-A, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. Irs amended tax return ) If you did not hold the debt instrument the entire year, figure your OID using either of the following methods. Irs amended tax return Method 1. Irs amended tax return    Divide the total OID for a calendar year by 365 (366 for leap years). Irs amended tax return Multiply the result in (1) by the number of days you held the debt instrument during that particular year. Irs amended tax return  This computation is an approximation and may result in a slightly higher OID than Method 2. Irs amended tax return Method 2. Irs amended tax return    Look up the daily OID for the first accrual period you held the debt instrument during a calendar year. Irs amended tax return (See Accrual period under Constant yield method, next. Irs amended tax return ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. Irs amended tax return If you held the debt instrument for part of both accrual periods, repeat (1) and (2) for the second accrual period. Irs amended tax return Add the results of (2) and (3). Irs amended tax return This is the OID to include in income, unless you paid an acquisition premium. Irs amended tax return (The reduction for acquisition premium is discussed later. Irs amended tax return ) Constant yield method. Irs amended tax return   This discussion shows how to figure OID on debt instruments issued after July 1, 1982, and before 1985, using a constant yield method. Irs amended tax return OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. Irs amended tax return   Figure the OID allocable to any accrual period as follows. Irs amended tax return Multiply the adjusted issue price at the beginning of the accrual period by the debt instrument's yield to maturity. Irs amended tax return Subtract from the result in (1) any qualified stated interest allocable to the accrual period. Irs amended tax return Accrual period. Irs amended tax return   An accrual period for any OID debt instrument issued after July 1, 1982, and before 1985 is each 1-year period beginning on the date of the issue of the obligation and each anniversary thereafter, or the shorter period to maturity for the last accrual period. Irs amended tax return Your tax year will usually include parts of two accrual periods. Irs amended tax return Daily OID. Irs amended tax return   The OID for any accrual period is allocated equally to each day in the accrual period. Irs amended tax return You must include in income the sum of the OID amounts for each day you hold the debt instrument during the year. Irs amended tax return If your tax year includes parts of two or more accrual periods, you must include the proper daily OID amounts for each accrual period. Irs amended tax return Figuring daily OID. Irs amended tax return   The daily OID for the initial accrual period is figured using the following formula. Irs amended tax return   (ip × ytm) − qsi     p   ip = issue price ytm = yield to maturity qsi = qualified stated interest p = number of days in accrual period         The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. Irs amended tax return Reduction for acquisition premium on debt instruments purchased before July 19, 1984. Irs amended tax return   If you bought the debt instrument at an acquisition premium before July 19, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. Irs amended tax return Figure the daily acquisition premium by dividing the total acquisition premium by the number of days in the period beginning on your purchase date and ending on the day before the date of maturity. Irs amended tax return Reduction for acquisition premium on debt instruments purchased after July 18, 1984. Irs amended tax return   If you bought the debt instrument at an acquisition premium after July 18, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. Irs amended tax return However, the method of figuring the daily acquisition premium is different from the method described in the preceding discussion. Irs amended tax return To figure the daily acquisition premium under this method, multiply the daily OID by the following fraction. Irs amended tax return The numerator is the acquisition premium. Irs amended tax return The denominator is the total OID remaining for the debt instrument after your purchase date. Irs amended tax return Section I-A is available at www. Irs amended tax return irs. Irs amended tax return gov/pub1212 and clicking the link under Recent Developments. Irs amended tax return Using Section I-A to figure accumulated OID. Irs amended tax return   If you bought your corporate debt instrument in a calendar year or the subsequent year, you can figure the accumulated OID to the date of purchase by adding the following amounts. Irs amended tax return The amount from the “Total OID to January 1, YYYY” column for your debt instrument. Irs amended tax return The OID from January 1 of a calendar year to the date of purchase, figured as follows. Irs amended tax return Multiply the daily OID for the first accrual period in the calendar year by the number of days from January 1 to the date of purchase, or the end of the accrual period if the debt instrument was purchased in the second or third accrual period. Irs amended tax return Multiply the daily OID for each subsequent accrual period by the number of days in the period to the date of purchase or the end of the accrual period, whichever applies. Irs amended tax return Add the amounts figured in (2a) and (2b). Irs amended tax return Debt Instruments Issued After 1984 If you hold debt instruments issued after 1984, you must report part of the OID in gross income each year that you own the debt instruments. Irs amended tax return You must include the OID in gross income whether or not you hold the debt instrument as a capital asset. Irs amended tax return Your basis in the debt instrument is increased by the OID you include in income. Irs amended tax return For information about showing the correct OID on your tax return, see How To Report OID, earlier. Irs amended tax return Form 1099-OID. Irs amended tax return   You should receive a Form 1099-OID showing OID for the part of a calendar year you held the debt instrument. Irs amended tax return However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. Irs amended tax return See Constant yield method and Reduction for acquisition premium, later. Irs amended tax return   You may also need to refigure the OID for a contingent payment or inflation-indexed debt instrument on which the amount reported on Form 1099-OID is inaccurate. Irs amended tax return See Contingent Payment Debt Instruments or Inflation-Indexed Debt Instruments, later. Irs amended tax return If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-B available at www. Irs amended tax return irs. Irs amended tax return gov/pub1212 by clicking the link under Recent Developments. Irs amended tax return Form 1099-OID not received. Irs amended tax return   The OID listed is for each $1,000 of redemption price. Irs amended tax return You must adjust the listed amount if your debt instrument has a different principal amount. Irs amended tax return For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. Irs amended tax return   Use the OID shown in Section I-B for a calendar year if you held the debt instrument the entire year. Irs amended tax return (If your debt instrument is not listed in Section I-B, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. Irs amended tax return ) If you did not hold the debt instrument the entire year, figure your OID as follows. Irs amended tax return Look up the daily OID for the first accrual period in which you held the debt instrument during a calendar year. Irs amended tax return (See Accrual period under Constant yield method, later. Irs amended tax return ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. Irs amended tax return Repeat (1) and (2) for any remaining accrual periods in which you held the debt instrument. Irs amended tax return Add the results of (2) and (3). Irs amended tax return This is the OID to include in income for that year, unless you paid an acquisition premium. Irs amended tax return (The reduction for acquisition premium is discussed later. Irs amended tax return ) Tax-exempt bond. Irs amended tax return   If you own a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. Irs amended tax return You need to make this adjustment to determine if you have a gain or loss on a later disposition of the bond. Irs amended tax return In general, use the rules that follow to determine your OID. Irs amended tax return Constant yield method. Irs amended tax return   This discussion shows how to figure OID on debt instruments issued after 1984 using a constant yield method. Irs amended tax return (The special rules that apply to contingent payment debt instruments and inflation-indexed debt instruments are explained later. Irs amended tax return ) OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. Irs amended tax return   Figure the OID allocable to any accrual period as follows. Irs amended tax return Multiply the adjusted issue price at the beginning of the accrual period by a fraction. Irs amended tax return The numerator of the fraction is the debt instrument's yield to maturity and the denominator is the number of accrual periods per year. Irs amended tax return The yield must be stated appropriately taking into account the length of the particular accrual period. Irs amended tax return Subtract from the result in (1) any qualified stated interest allocable to the accrual period. Irs amended tax return Accrual period. Irs amended tax return   For debt instruments issued after 1984 and before April 4, 1994, an accrual period is each 6-month period that ends on the day that corresponds to the stated maturity date of the debt instrument or the date 6 months before that date. Irs amended tax return For example, a debt instrument maturing on March 31 has accrual periods that end on September 30 and March 31 of each calendar year. Irs amended tax return Any short period is included as the first accrual period. Irs amended tax return   For debt instruments issued after April 3, 1994, accrual periods may be of any length and may vary in length over the term of the debt instrument, as long as each accrual period is no longer than 1 year and all payments are made on the first or last day of an accrual period. Irs amended tax return However, the OID listed for these debt instruments in Section I-B has been figured using 6-month accrual periods. Irs amended tax return Daily OID. Irs amended tax return   The OID for any accrual period is allocated equally to each day in the accrual period. Irs amended tax return Figure the amount to include in income by adding the OID for each day you hold the debt instrument during the year. Irs amended tax return Since your tax year will usually include parts of two or more accrual periods, you must include the proper daily OID for each accrual period. Irs amended tax return If your debt instrument has 6-month accrual periods, your tax year will usually include one full 6-month accrual period and parts of two other 6-month periods. Irs amended tax return Figuring daily OID. Irs amended tax return   The daily OID for the initial accrual period is figured using the following formula. Irs amended tax return   (ip × ytm/n) − qsi     p   ip = issue price ytm = yield to maturity n = number of accrual periods in 1 year qsi = qualified stated interest p = number of days in accrual period       The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. Irs amended tax return Example 5. Irs amended tax return On January 1 of Year 1, you bought a 15-year, 10% debt instrument of A Corporation at original issue for $86,235. Irs amended tax return 17. Irs amended tax return According to the prospectus, the debt instrument matures on December 31 of Year 15 at a stated redemption price of $100,000. Irs amended tax return The yield to maturity is 12%, compounded semiannually. Irs amended tax return The debt instrument provides for qualified stated interest payments of $5,000 on June 30 and December 31 of each calendar year. Irs amended tax return The accrual periods are the 6-month periods ending on each of these dates. Irs amended tax return The number of days for the first accrual period (January 1 through June 30) is 181 days (182 for leap years). Irs amended tax return The daily OID for the first accrual period is figured as follows. Irs amended tax return   ($86,235. Irs amended tax return 17 x . Irs amended tax return 12/2) – $5,000     181 days     = $174. Irs amended tax return 11020 = $. Irs amended tax return 96193   181           The adjusted issue price at the beginning of the second accrual period is the issue price plus the OID previously includible in income ($86,235. Irs amended tax return 17 + $174. Irs amended tax return 11), or $86,409. Irs amended tax return 28. Irs amended tax return The number of days for the second accrual period (July 1 through December 31) is 184 days. Irs amended tax return The daily OID for the second accrual period is figured as follows. Irs amended tax return   ($86,409. Irs amended tax return 28 x . Irs amended tax return 12/2) – $5,000     184 days     = $184. Irs amended tax return 55681 = $1. Irs amended tax return 00303   184 Since the first and second accrual periods coincide exactly with your tax year, you include in income for Year 1 the OID allocable to the first two accrual periods, $174. Irs amended tax return 11 ($. Irs amended tax return 95665 × 182 days) plus $184. Irs amended tax return 56 ($1. Irs amended tax return 00303 × 184 days), or $358. Irs amended tax return 67. Irs amended tax return Add the OID to the $10,000 interest you report on your income tax return for Year 1. Irs amended tax return Example 6. Irs amended tax return Assume the same facts as in Example 5, except that you bought the debt instrument at original issue on May 1 of Year 1, with a maturity date of April 30, Year 16. Irs amended tax return Also, the interest payment dates are October 31 and April 30 of each calendar year. Irs amended tax return The accrual periods are the 6-month periods ending on each of these dates. Irs amended tax return The number of days for the first accrual period (May 1 through October 31) is 184 days. Irs amended tax return The daily OID for the first accrual period is figured as follows. Irs amended tax return   ($86,235. Irs amended tax return 17 x . Irs amended tax return 12/2) – $5,000     184 days     = $174. Irs amended tax return 11020 = $. Irs amended tax return 94625   184           The number of days for the second accrual period (November 1 through April 30) is 181 days (182 for leap years). Irs amended tax return The daily OID for the second accrual period is figured as follows. Irs amended tax return   ($86,409. Irs amended tax return 28 x . Irs amended tax return 12/2) – $5,000     181 days     = $184. Irs amended tax return 55681 = $1. Irs amended tax return 01965   181 If you hold the debt instrument through the end of Year 1, you must include $236. Irs amended tax return 31 of OID in income. Irs amended tax return This is $174. Irs amended tax return 11 ($. Irs amended tax return 94625 × 184 days) for the period May 1 through October 31 plus $62. Irs amended tax return 20 ($1. Irs amended tax return 01965 × 61 days) for the period November 1 through December 31. Irs amended tax return The OID is added to the $5,000 interest income paid on October 31 of Year 1. Irs amended tax return Your basis in the debt instrument is increased by the OID you include in income. Irs amended tax return On January 1 of Year 2, your basis in the A Corporation debt instrument is $86,471. Irs amended tax return 48 ($86,235. Irs amended tax return 17 + $236. Irs amended tax return 31). Irs amended tax return Short first accrual period. Irs amended tax return   You may have to make adjustments if a debt instrument has a short first accrual period. Irs amended tax return For example, a debt instrument with 6-month accrual periods that is issued on February 15 and matures on October 31 has a short first accrual period that ends April 30. Irs amended tax return (The remaining accrual periods begin on May 1 and November 1. Irs amended tax return ) For this short period, figure the daily OID as described earlier, but adjust the yield for the length of the short accrual period. Irs amended tax return You may use any reasonable compounding method in determining OID for a short period. Irs amended tax return Examples of reasonable compounding methods include continuous compounding and monthly compounding (that is, simple interest within a month). Irs amended tax return Consult your tax advisor for more information about making this computation. Irs amended tax return   The OID for the final accrual period is the difference between the amount payable at maturity (other than a payment of qualified stated interest) and the adjusted issue price at the beginning of the final accrual period. Irs amended tax return Reduction for acquisition premium. Irs amended tax return   If you bought the debt instrument at an acquisition premium, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. Irs amended tax return To figure the daily acquisition premium, multiply the daily OID by the following fraction. Irs amended tax return The numerator is the acquisition premium. Irs amended tax return The denominator is the total OID remaining for the debt instrument after your purchase date. Irs amended tax return Example 7. Irs amended tax return Assume the same facts as in Example 6, except that you bought the debt instrument on November 1 of Year 1 for $87,000, after its original issue on May 1 of Year 1. Irs amended tax return The adjusted issue price on November 1 of Year 1 is $86,409. Irs amended tax return 28 ($86,235. Irs amended tax return 17 + $174. Irs amended tax return 11). Irs amended tax return In this case, you paid an acquisition premium of $590. Irs amended tax return 72 ($87,000 − $86,409. Irs amended tax return 28). Irs amended tax return The daily OID for the accrual period November 1 through April 30, reduced for the acquisition premium, is figured as follows. Irs amended tax return 1) Daily OID on date of purchase (2nd accrual period) $1. Irs amended tax return 01965*  2)  Acquisition premium $590. Irs amended tax return 72    3)  Total OID remaining after purchase date ($13,764. Irs amended tax return 83 − $174. Irs amended tax return 11) 13,590. Irs amended tax return 72   4) Line 2 ÷ line 3 . Irs amended tax return 04346  5)  Line 1 × line 4 . Irs amended tax return 04432  6)  Daily OID reduced for the acquisition premium. Irs amended tax return Line 1 − line 5 $0. Irs amended tax return 97533  * As shown in Example 6. Irs amended tax return The total OID to include in income for Year 1 is $59. Irs amended tax return 50 ($. Irs amended tax return 97533 × 61 days). Irs amended tax return Contingent Payment Debt Instruments This discussion shows how to figure OID on a contingent payment debt instrument issued after August 12, 1996, that was issued for cash or publicly traded property. Irs amended tax return In general, a contingent payment debt instrument provides for one or more payments that are contingent as to timing or amount. Irs amended tax return If you hold a contingent payment bond, you must report OID as it accrues each year. Irs amended tax return Because the actual payments on a contingent payment debt instrument cannot be known in advance, issuers and holders cannot use the constant yield method (discussed earlier under Debt Instruments Issued After 1984) without making certain assumptions about the payments on the debt instrument. Irs amended tax return To figure OID accruals on contingent payment debt instruments, holders and issuers must use the noncontingent bond method. Irs amended tax return Noncontingent bond method. Irs amended tax return    Under this method, the issuer must compute a comparable yield for the debt instrument and, based on this yield, construct a projected payment schedule for the instrument, which includes a projected fixed amount for each contingent payment. Irs amended tax return In general, holders and issuers accrue OID on this projected payment schedule using the constant yield method that applies to fixed payment debt instruments. Irs amended tax return When a contingent payment differs from the projected fixed amount, the holders and issuers make adjustments to their OID accruals. Irs amended tax return If the actual contingent payment is larger than expected, both the issuer and the holder increase their OID accruals. Irs amended tax return If the actual contingent payment is smaller than expected, holders and issuers generally decrease their OID accruals. Irs amended tax return Form 1099-OID. Irs amended tax return   The amount shown on Form 1099-OID in box 1 you receive for a contingent payment debt instrument may not be the correct amount to include in income. Irs amended tax return For example, the amount may not be correct if the contingent payment was different from the projected amount. Irs amended tax return If the amount in box 1 is not correct, you must figure the OID to report on your return under the following rules. Irs amended tax return For information on showing an OID adjustment on your tax return, see How To Report OID, earlier. Irs amended tax return Figuring OID. Irs amended tax return   To figure OID on a contingent payment debt instrument, you need to know the “comparable yield” and “projected payment schedule” of the debt instrument. Irs amended tax return The issuer must make these available to you. Irs amended tax return Comparable yield. Irs amended tax return   The comparable yield generally is the yield at which the issuer would issue a fixed rate debt instrument with terms and conditions similar to those of the contingent payment debt instrument. Irs amended tax return The comparable yield is determined as of the debt instrument's issue date. Irs amended tax return Projected payment schedule. Irs amended tax return   The projected payment schedule for a contingent payment debt instrument includes all fixed payments due under the instrument and a projected fixed amount for each contingent payment. Irs amended tax return The projected payment schedule is created by the issuer as of the debt instrument's issue date. Irs amended tax return It is used to determine the issuer's and holder's interest accruals and adjustments. Irs amended tax return Steps for figuring OID. Irs amended tax return   Figure the OID on a contingent payment debt instrument in two steps. Irs amended tax return Figure the OID using the constant yield method (discussed earlier under Debt Instruments Issued After 1984 ) that applies to fixed payment debt instruments. Irs amended tax return Use the comparable yield as the yield to maturity. Irs amended tax return In general, use the projected payment schedule to determine the instrument's adjusted issue price at the beginning of each accrual period (other than the initial period). Irs amended tax return Do not treat any amount payable as qualified stated interest. Irs amended tax return Adjust the OID in (1) to account for actual contingent payments. Irs amended tax return If the contingent payment is greater than the projected fixed amount, you have a positive adjustment. Irs amended tax return If the contingent payment is less than the projected fixed amount, you have a negative adjustment. Irs amended tax return Net positive adjustment. Irs amended tax return   A net positive adjustment exists for a tax year when the total of any positive adjustments described in (2) above for the tax year is more than the total of any negative adjustments for the tax year. Irs amended tax return Treat a net positive adjustment as additional OID for the tax year. Irs amended tax return Net negative adjustment. Irs amended tax return   A net negative adjustment exists for a tax year when the total of any negative adjustments described in (2) above for the tax year is more than the total of any positive adjustments for the tax year. Irs amended tax return Use a net negative adjustment to offset OID on the debt instrument for the tax year. Irs amended tax return If the net negative adjustment is more than the OID on the debt instrument for the tax year, you can claim the difference as an ordinary loss. Irs amended tax return However, the amount you can claim as an ordinary loss is limited to the OID on the debt instrument you included in income in prior tax years. Irs amended tax return You must carry forward any net negative adjustment that is more than the total OID for the tax year and prior tax years and treat it as a negative adjustment in the next tax year. Irs amended tax return Basis adjustments. Irs amended tax return   In general, increase your basis in a contingent payment debt instrument by the OID included in income. Irs amended tax return Your basis, however, is not affected by any negative or positive adjustments. Irs amended tax return Decrease your basis by any noncontingent payment received and the projected contingent payment scheduled to be received. Irs amended tax return Treatment of gain or loss on sale or exchange. Irs amended tax return   If you sell a contingent payment debt instrument at a gain, your gain is ordinary income (interest income), even if you hold the debt instrument as a capital asset. Irs amended tax return If you sell a contingent payment debt instrument at a loss, your loss is an ordinary loss to the extent of your prior OID accruals on the debt instrument. Irs amended tax return If the debt instrument is a capital asset, treat any loss that is more than your prior OID accruals as a capital loss. Irs amended tax return See Regulations section 1. Irs amended tax return 1275-4 for exceptions to these rules. Irs amended tax return Premium, acquisition premium, and market discount. Irs amended tax return   The rules for accruing premium, acquisition premium, and market discount do not apply to a contingent payment debt instrument. Irs amended tax return See Regulations section 1. Irs amended tax return 1275-4 to determine how to account for these items. Irs amended tax return Inflation-Indexed Debt Instruments This discussion shows how you figure OID on certain inflation-indexed debt instruments issued after January 5, 1997. Irs amended tax return An inflation-indexed debt instrument is generally a debt instrument on which the payments are adjusted for inflation and d