Form 1099-Oid - Original Issue Discount - 2017 (Page 5 of 9) in pdf

Instructions for Recipient

Box 1. Shows the OID on a taxable obligation for the part of the year you owned

Original issue discount (OID) is the excess of an obligation’s stated redemption

it. Report the amount in box 1 as interest income on your income tax return.

price at maturity over its issue price (acquisition price for a stripped bond or

However, depending on the type of debt instrument, the issue or acquisition

coupon). OID on a taxable obligation is taxable as interest over the life of the

date, and other factors (for example, if you paid acquisition or bond premium, or

obligation. If you are the holder of a taxable OID obligation, generally you must

the obligation is a stripped bond or coupon), you may have to figure the correct

include an amount of OID in your gross income each year you hold the

amount of OID to report on your return. See Pub. 1212 for details on how to

obligation. Obligations that may have OID include a bond, debenture, note,

figure the correct OID. See the instructions above for a covered security

certificate, or other evidence of indebtedness having a term of more than 1 year.

acquired with acquisition premium.

For example, the OID rules may apply to certificates of deposit (CDs), time

deposits, bonus savings plans, and other deposit arrangements, especially if the

Box 2. Shows qualified stated interest on this obligation for the year, which is an

payment of interest is deferred until maturity. In addition, the OID rules apply to

amount separate from the OID. If you held the obligation the entire year, report

Treasury inflation-protected securities. See Pub. 550 for more information.

this amount as interest income on your tax return. If you disposed of the

obligation or acquired it from another holder during the year, see Pub. 550 for

If, as the record holder, you receive Form 1099-OID showing amounts

reporting instructions. If there is an amount in both boxes 2 and 8, the amount in

belonging to another person, you are considered a nominee recipient. Complete

box 2 is interest on a U.S. Treasury obligation and is exempt from state and

a Form 1099-OID for each of the other owners showing the amounts allocable to

local income taxes. If there is an amount in both boxes 2 and 11, the amount in

each. File Copy A of the form with the IRS. Furnish Copy B to each owner. List

box 2 is tax-exempt interest and is not included in interest income on your tax

yourself as the “payer” and the other owner as the “recipient.” File Form(s)

return. In general, report this amount on line 8b on Form 1040.

1099-OID with Form 1096, with the Internal Revenue Service Center for your

area. On Form 1096, list yourself as the “filer.” A spouse is not required to file a

Box 3. Shows interest or principal forfeited if you withdrew the money before

nominee return to show amounts owned by the other spouse. If you bought or

the maturity date of the obligation, such as from a CD. You may deduct this

sold an obligation during the year and you are not a nominee, you are not

amount to figure your adjusted gross income on your income tax return. See the

required to issue or file Form 1099-OID showing the OID or stated interest

Instructions for Form 1040 to see where to take the deduction.

allocable to the seller/buyer of the obligation.

Box 4. Shows backup withholding. Generally, a payer must backup withhold if

The information provided may be different for covered and noncovered

you did not furnish your taxpayer identification number (TIN) or you did not

securities. For a description of covered securities, see the Instructions for Form

furnish the correct TIN to the payer. See Form W-9 for information on backup

8949. For a covered security acquired with acquisition premium, your payer may

withholding. Include this amount on your income tax return as tax withheld.

report either (1) a net amount of OID that reflects the offset of OID by the

Box 5. For a covered security acquired with OID, if you made an election under

amount of acquisition premium amortization for the year, or (2) a gross amount

section 1278(b) to include market discount in income as it accrues and you

for both the OID and the acquisition premium amortization for the year. For a

notified your payer of the election in writing in accordance with Regulations

noncovered security acquired with acquisition premium, your payer is only

section 1.6045-1(n)(5), shows the market discount that accrued on the debt

required to report the gross amount of OID.

instrument during the year while held by you. For a tax-exempt obligation that is

Recipient's taxpayer identification number. For your protection, this form may

a covered security acquired on or after January 1, 2017, and issued with OID,

show only the last four digits of your social security number (SSN), individual

shows the market discount that accrued on the obligation during the year while

taxpayer identification number (ITIN), adoption taxpayer identification number

held by you. For a covered security acquired on or after January 1, 2015, market

(ATIN), or employer identification number (EIN). However, the issuer has

discount will be calculated on a constant yield basis unless you notified your

reported your complete identification number to the IRS.

payer in writing in accordance with Regulations section 1.6045-1(n)(5) that you

did not want to make a constant yield election for market discount under section

FATCA filing requirement. If the FATCA filing requirement box is checked, the

1276(b). The payer may, but is not required to, report the market discount for a

payer is reporting on this Form 1099 to satisfy its chapter 4 account reporting

tax-exempt obligation that is a covered security acquired before January 1,

requirement. You also may have a filing requirement. See the Instructions for

2017. Report the accrued market discount on your income tax return as directed

Form 8938.

in the instructions for Form 1040 or 1040A. Market discount on a tax-exempt

Account number. May show an account or other unique number the payer

security is includible in taxable income as interest income.

assigned to distinguish your account.

(Continued on the back of Copy 2)

Form 1099-Oid - Original Issue Discount - 2017 Page 5

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