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Use Schedule B (Form 1040) if any of the following applies.

Instructions for

•

You had over $1,500 of taxable interest.

•

Any of the Special Rules listed in the instructions for line 1 apply to you.

Schedule B,

•

You are claiming the exclusion of interest from series EE or I U.S. savings bonds issued

after 1989.

•

Interest and

You had over $1,500 of ordinary dividends.

•

You received ordinary dividends as a nominee.

•

Ordinary

You had a foreign account or you received a distribution from, or were a grantor of, or

transferor to, a foreign trust. Part III of the schedule has questions about foreign accounts and

trusts.

Dividends

You can list more than one

low this subtotal, enter “Nominee Distribu-

you paid qualified higher education ex-

payer on each entry space for

tion” and show the total interest you

TIP

penses for yourself, your spouse, or your

lines 1 and 5, but be sure to

received as a nominee. Subtract this

dependents, you may be able to exclude

clearly show the amount paid

amount from the subtotal and enter the re-

part or all of the interest on those bonds.

next to the payer’s name. Add the separate

sult on line 2.

See Form 8815 for details.

amounts paid by the payers listed on an

entry space and enter the total in the

If you received interest as a

“Amount” column. If you still need more

nominee, you must give the ac-

TIP

space, attach separate statements that are

tual owner a Form 1099-INT

Part II. Ordinary

the same size as the printed schedule. Use

unless the owner is your

the same format as lines 1 and 5, but show

spouse. You must also file a Form 1096 and

Dividends

your totals on Schedule B. Be sure to put

a Form 1099-INT with the IRS. For more

your name and social security number

details, see the General Instructions for

You may have to file Form

(SSN) on the statements and attach them at

Forms 1099, 1098, 5498, and W-2G and

5471 if, in 2006, you were an

TIP

the end of your return.

the Instructions for Forms 1099-INT and

officer or director of a foreign

1099-OID.

corporation. You may also have

to file Form 5471 if, in 2006, you owned

Accrued Interest

Part I. Interest

10% or more of the total (a) value of a

When you buy bonds between interest pay-

foreign corporation’s stock, or (b) com-

ment dates and pay accrued interest to the

bined voting power of all classes of a for-

seller, this interest is taxable to the seller. If

Line 1

eign corporation’s stock with voting rights.

you received a Form 1099 for interest as a

For details, see Form 5471 and its instruc-

purchaser of a bond with accrued interest,

Interest

tions.

follow the rules earlier under Nominees to

see how to report the accrued interest on

Report on line 1 all of your taxable interest.

Schedule B. But identify the amount to be

Interest should be shown on your Forms

subtracted as “Accrued Interest.”

1099-INT, Forms 1099-OID, or substitute

Line 5

statements. Include interest from series EE

Original Issue Discount (OID)

and I U.S. savings bonds. List each payer’s

Ordinary Dividends

name and show the amount.

If you are reporting OID in an amount less

Report on line 5 all of your ordinary divi-

than the amount shown on Form

Special Rules

dends. This amount should be shown in box

1099-OID, follow the rules earlier under

1a of your Forms 1099-DIV or substitute

Nominees to see how to report the OID on

Seller-Financed Mortgages

statements. List each payer’s name and

Schedule B. But identify the amount to be

If you sold your home or other property and

show the amount.

subtracted as “OID Adjustment.”

the buyer used the property as a personal

Amortizable Bond Premium

residence, list first any interest the buyer

Nominees

paid you on a mortgage or other form of

If you are reducing your interest income on

seller financing. Be sure to show the

If you received a Form 1099-DIV that in-

a bond by the amount of amortizable bond

buyer’s name, address, and SSN. You must

cludes ordinary dividends you received as a

premium, follow the rules earlier under

also let the buyer know your SSN. If you do

Nominees to see how to report the interest

nominee (that is, in your name, but the ordi-

not show the buyer’s name, address, and

on Schedule B. But identify the amount to

nary dividends actually belong to someone

SSN, or let the buyer know your SSN, you

be subtracted as “ABP Adjustment.”

else), report the total on line 5. Do this even

may have to pay a $50 penalty.

if you later distributed some or all of this

Nominees

income to others. Under your last entry on

Line 3

If you received a Form 1099-INT that in-

line 5, put a subtotal of all ordinary divi-

cludes interest you received as a nominee

dends listed on line 5. Below this subtotal,

Excludable Interest on

(that is, in your name, but the interest actu-

enter “Nominee Distribution” and show the

ally belongs to someone else), report the

Series EE and I U.S. Savings

total ordinary dividends you received as a

total on line 1. Do this even if you later

Bonds Issued After 1989

nominee. Subtract this amount from the

distributed some or all of this income to

subtotal and enter the result on line 6.

others. Under your last entry on line 1, put a

If, during 2006, you cashed series EE or I

subtotal of all interest listed on line 1. Be-

U.S. savings bonds issued after 1989 and

B-1

Instructions For Schedule B - Interest And Ordinary Dividends - Internal Revenue Service - 2006

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