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Yield to maturity (YTM). In general, the YTM

such as the Resolution Funding Corporation.

Commercial paper and banker’s accept-

is the discount rate that, when used in figuring

ances issued at a discount.

This section also includes instruments backed

the present value of all principal and interest

by U.S. Treasury securities that represent own-

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Obligations issued at a discount by individ-

payments, produces an amount equal to the

ership interests in those securities.

uals.

issue price of the bond. The YTM is generally

The obligations listed in Section II are ar-

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shown on the face of the bond or in the literature

Foreign obligations not traded in the

ranged by maturity date. The amounts listed are

you receive from your broker. If you do not have

United States and obligations not issued in

the total OID for calendar year 2002 per $1,000

the United States.

this information, consult your broker, tax advi-

of redemption price.

sor, or the issuer.

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OID debt instruments for which no infor-

Section III. This section contains short-term

mation was available or that were issued

discount obligations. Section III – A lists Trea-

in late 2002 after publication of this list.

sury bills (T-bills), which are short-term discount

These will be included in the next revision

Information

obligations issued by the U.S. Treasury Depart-

of the publication.

in the OID List

ment. Sections III – B through III – G contain

short-term discount obligations issued by the

Student Loan Marketing Association, Federal

The information in the OID list can be used by

Home Loan Banks, the Federal National Mort-

Information for

brokers and other middlemen to prepare infor-

gage Association, Federal Farm Credit Banks,

mation returns for 2002.

Brokers and

the Federal Home Loan Mortgage Corporation,

If you own a listed debt instrument, you

and the Federal Agricultural Mortgage Corpora-

Other Middlemen

generally should not rely on the infor-

tion.

mation in the OID list to determine (or

CAUTION

Information that supplements Section

compare) the OID to be reported on your tax

The following discussions contain specific in-

III – A is available on the Internet at

return. The OID amounts listed are figured with-

structions for brokers and middlemen who hold

out reference to the price or date at which you

or redeem a debt instrument for the owner.

acquired the debt instrument. For information

In general, you must file a Form 1099 for the

about determining the OID to be reported on

debt instrument if the interest or OID to be in-

The short-term obligations listed in this sec-

your tax return, see the instructions for figuring

cluded in the owner’s income for 2002 totals $10

tion are arranged by maturity date. For each

OID under Information for Owners of OID Debt

or more. You also must file a Form 1099 if you

obligation, the list contains the CUSIP number,

Instruments, later.

were required to deduct and withhold tax, even if

maturity date, issue date, issue price (expressed

the interest or OID is less than $10. See Backup

as a percent of principal), and discount to be

Withholding, later.

The following discussions explain what infor-

reported as interest for calendar year 2002 per

If you must file a Form 1099, furnish a copy

mation is contained in each section of the list.

$1,000 of redemption price. Brokers and other

to the owner of the debt instrument by January

middlemen should rely on the issue price infor-

Section I. This section contains publicly of-

31, 2003. By February 28, 2003, (March 31,

mation in Section III only if they are unable to

fered, long-term debt instruments. Section I – A

2003, if you file electronically), file all your Forms

determine the price actually paid by the owner.

lists corporate debt instruments issued before

1099 with the IRS, accompanied by Form 1096.

1985. Section I – B lists debt instruments issued

after 1984. Section I – C lists inflation-indexed

Electronic payee statements. You can issue

debt instruments issued after January 5, 1997.

Form 1099 – OID electronically with the consent

Debt Instruments

For each publicly offered debt instrument in

of the recipient.

Section I, the list contains the following informa-

Not on the OID List

More information. For more information, in-

tion.

cluding penalties for failure to file (or furnish)

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The name of the issuer.

The list of debt instruments in this publication

required information returns or statements, see

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the 2002 General Instructions for Form 1099,

does not contain the following items.

The Committee on Uniform Security Iden-

1098, 5498, and W – 2G.

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tification Procedures (CUSIP) number.

U.S. savings bonds.

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The issue date.

Short-Term Obligations

Certificates of deposit and other

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face-amount certificates issued at a dis-

Redeemed at Maturity

The maturity date.

count, including syndicated certificates of

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The issue price expressed as a percent of

deposit.

If you redeem a short-term discount obligation

principal or of stated redemption price at

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for the owner at maturity, you must report the

Obligations issued by tax-exempt organi-

maturity.

discount as interest on Form 1099 – INT.

zations.

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The annual stated or coupon interest rate.

To figure the discount, use the purchase

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OID debt instruments that matured or

(This rate is shown as 0.00 if no annual

price shown on the owner’s copy of the

were entirely called by the issuer before

interest payments are provided.)

purchase confirmation receipt or similar record,

2002.

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or the price shown in your transaction records.

The total OID up to January 1, 2002.

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(This information is not available for every

Mortgage-backed securities and mortgage

If you sell the obligation for the owner

participation certificates.

instrument.)

before maturity, you must file Form

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1099 – B to reflect the gross proceeds

CAUTION

Long-term OID debt instruments issued

For long-term instruments issued after

to the seller. Do not report the accrued discount

July 1, 1982, the daily OID for the accrual

before May 28, 1969.

to the date of sale on either Form 1099 – INT or

periods falling in calendar years 2002 and

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Short-term obligations, other than the obli-

Form 1099 – OID.

2003.

gations listed in Section III.

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The total OID per $1,000 of principal or

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Original issue U.S. Treasury notes and

If the owner’s purchase price cannot be de-

maturity value for calendar years 2002

bonds. These debt instruments are direct

termined, figure the discount as if the owner had

and 2003.

obligations of the U.S. Government. Gen-

purchased the obligation at its original issue

erally, they contain either de minimis or no

price. A special rule is used to determine the

See Table 1 on the page preceding Section

discount at original issue. See U.S. Trea-

original issue price for information reporting on

I-A for an explanation of these items.

sury Bills, Notes, and Bonds in chapter 1

U.S. Treasury bills (T-bills) listed in Section

Section II. This section contains stripped obli-

of Publication 550 for more information.

III – A. Under this rule, you treat as the original

gations available through the Department of the

issue price of the T-bill the noncompetitive

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Debt instruments issued at a discount by

Treasury’s Separate Trading of Registered In-

(weighted average of accepted auction bids)

states or their political subdivisions.

terest and Principal of Securities (STRIPS) pro-

discount price for the longest-maturity T-bill ma-

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gram and government-sponsored enterprises

REMIC regular interests and CDOs.

turing on the same date as the T-bill being re-

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Publication 1212 - List Of Original Issue Discount Instruments - Department Of Treasury - 2002 Page 3

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