Looking for a Irs Publications? Download it for free!

Original issue discount (OID). OID is a form

Internal Revenue Service

of interest. It is the excess of a debt instrument’s

Important Change

OID Publication Project

stated redemption price at maturity over its issue

W:CAR:MP:FP

price (acquisition price for a stripped bond or

Electronic payee statements. You can now

1111 Constitution Ave. NW

coupon). Zero coupon bonds and debt instru-

issue Form 1099 – OID electronically with the

Washington, D.C. 20224

ments that pay no stated interest until maturity

consent of the recipient. For more information,

are examples of debt instruments that have OID.

see Part H in the 2002 General Instructions for

Accrual period. An accrual period is an inter-

REMIC and CDO information reporting re-

Forms 1099, 1098, 5498, and W – 2G.

val of time used to measure OID. The length of

quirements. Brokers and other middlemen

an accrual period can be 6 months, a year, or

must follow special information reporting re-

some other period, depending on when the debt

quirements for real estate mortgage investment

instrument was issued.

(REMIC) regular and collateralized debt obliga-

Important Reminder

tions (CDO) interests. The rules are explained in

Acquisition premium. Acquisition premium is

Publication 938, Real Estate Mortgage Invest-

the excess of a bond’s adjusted basis immedi-

ment Conduits (REMICs) Reporting Information.

Photographs of missing children. The Inter-

ately after purchase, including purchase at origi-

Holders of interests in REMICs and CDOs

nal Revenue Service is a proud partner with the

nal issue, over the bond’s adjusted issue price at

should see chapter 1 of Publication 550 for infor-

National Center for Missing and Exploited Chil-

that time. A bond does not have acquisition

mation on REMICs and CDOs.

dren. Photographs of missing children selected

premium, however, if the bond was purchased

by the Center may appear in this publication on

at a premium. See Premium, later.

Comments and suggestions. We welcome

pages that would otherwise be blank. You can

your comments about this publication and your

Adjusted issue price. The adjusted issue

help bring these children home by looking at the

suggestions for future editions.

price of a debt instrument at the beginning of an

photographs and calling 1 – 800 – THE – LOST

You can e-mail us while visiting our web site

accrual period is used to figure the OID allocable

(1 – 800 – 843 – 5678) if you recognize a child.

to that period. In general, the adjusted issue

You can write to us at the following address:

price at the beginning of the instrument’s first

accrual period is its issue price. The adjusted

Internal Revenue Service

issue price at the beginning of any subsequent

Introduction

Tax Forms and Publications

accrual period is the sum of the issue price and

W:CAR:MP:FP

all the OID includible in income before that ac-

This publication has two purposes. Its primary

1111 Constitution Ave. NW

crual period minus any payment previously

purpose is to help brokers and other middlemen

Washington, DC 20224

made on the instrument, other than a payment of

identify publicly offered original issue discount

qualified stated interest.

(OID) debt instruments they may hold as nomi-

We respond to many letters by telephone.

Debt instrument. The term “debt instrument”

nees for the true owners, so they can file Forms

Therefore, it would be helpful if you would in-

means a bond, debenture, note, certificate, or

1099 – OID or Forms 1099 – INT as required.

clude your daytime phone number, including the

other evidence of indebtedness. It generally

area code, in your correspondence.

The other purpose of the publication is to help

does not include an annuity contract.

owners of publicly offered OID debt instruments

Useful Items

Issue price. For instruments listed in Section

determine how much OID to report on their in-

You may want to see:

I – A and Section I – B, the issue price is the initial

come tax returns.

offering price to the public (excluding bond

This publication contains a list of publicly

Publication

houses and brokers) at which a substantial

offered OID debt instruments. The information

amount of these instruments was sold.

515

Withholding of Tax on Nonresident

on this list comes from the issuers of the debt

Aliens and Foreign Entities

Market discount. Market discount arises

instruments and from financial publications and

when a debt instrument purchased in the secon-

is updated annually. (However, see Debt Instru-

550

Investment Income and Expenses

dary market has decreased in value since its

ments Not on the OID List, later.)

938

Real Estate Mortgage Investment

issue date, generally because of an increase in

Brokers and other middlemen can rely on

Conduits (REMICs) Reporting

interest rates. An OID bond has market discount

this list to determine, for information reporting

Information

if your adjusted basis in the bond immediately

purposes, whether a debt instrument was issued

after you acquired it (usually its purchase price)

at a discount and the OID to be reported on

Form (and Instructions)

was less than the bond’s issue price plus the

information returns. However, because the in-

total OID that accrued before you acquired it.

1096 Annual Summary and Transmittal of

formation in the list has generally not been veri-

The market discount is the difference between

U.S. Information Returns

the issue price plus accrued OID and your ad-

fied by the IRS as correct, the following tax

1099 – B Proceeds From Broker and

justed basis.

matters are subject to change upon examination

Barter Exchange Transactions

by the IRS.

Premium. A debt instrument is purchased at a

1099 – INT Interest Income

•

premium if its adjusted basis immediately after

The OID reported by owners of a debt

purchase is greater than the total of all amounts

1099 – OID Original Issue Discount

instrument on their income tax returns.

payable on the instrument after the purchase

•

Schedule B (Form 1040) Interest and

The issuer’s classification of an instrument

date, other than qualified stated interest. The

Ordinary Dividends

premium is the excess of the adjusted basis over

as debt for federal income tax purposes.

the payable amounts. See Publication 550 for

Schedule D (Form 1040) Capital Gains

information on the tax treatment of bond pre-

and Losses

Instructions for issuers of OID debt instru-

mium.

ments. In general, issuers of publicly offered

W – 8 Certificate of Foreign Status

OID debt instruments must, within 30 days after

Qualified stated interest. In general, quali-

See How To Get Tax Help near the end of

fied stated interest is stated interest that is un-

the issue date, report information about the in-

the text for information about getting publica-

conditionally payable in cash or property (other

struments to the IRS on Form 8281, Information

tions and forms.

than debt instruments of the issuer) at least

Return for Publicly Offered Original Issue Dis-

annually over the term of the instrument at a

count Instruments. See the form instructions for

single fixed rate.

more information.

Definitions

Stated redemption price at maturity. An

Issuers should report errors in and

instrument’s stated redemption price at maturity

omissions from the list in writing at the

The following terms are used throughout this

is the sum of all amounts (principal and interest)

following address:

publication. “Original issue discount” is defined

payable on the instrument other than qualified

first. The other terms are listed alphabetically.

stated interest.

Page 2

Publication 1212 - List Of Original Issue Discount Instruments - Department Of Treasury - 2002 Page 2

Related Articles

Related forms

Related Categories