Form 1099-Oid - Original Issue Discount - 2016 (Page 5 of 9) in pdf

Instructions for Recipient

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

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

assigned to distinguish your account.

at maturity over its issue price (acquisition price for a stripped bond or coupon). OID

on a taxable obligation is taxable as interest over the life of the obligation. If you are

Box 1. Shows the OID on the obligation for the part of the year you owned it. Report the

the holder of a taxable OID obligation, generally you must include an amount of OID in

amount in box 1 as interest income on your income tax return. However, depending on the

your gross income each year you hold the obligation. Obligations that may have OID

type of debt instrument, the issue or acquisition date, and other factors (for example, if

include a bond, debenture, note, certificate, or other evidence of indebtedness having

you paid acquisition or bond premium, or the obligation is a stripped bond or coupon),

a term of more than 1 year. For example, the OID rules may apply to certificates of

you may have to figure the correct amount of OID to report on your return. See Pub. 1212

deposit (CDs), time deposits, bonus savings plans, and other deposit arrangements,

for details on how to figure the correct OID. See the instructions above for a covered

especially if the payment of interest is deferred until maturity. In addition, the OID rules

security acquired with acquisition premium.

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

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

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

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

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

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

1099-OID for each of the other owners showing the amounts allocable to each. File

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

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

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

“payer” and the other owner as the “recipient.” File Form(s) 1099-OID with Form

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

1096, with the Internal Revenue Service Center for your area. On Form 1096, list

local income taxes.

yourself as the “filer.” A spouse is not required to file a nominee return to show

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

amounts owned by the other spouse. If you bought or sold an obligation during the

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

year and you are not a nominee, you are not required to issue or file Form 1099-OID

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

showing the OID or stated interest allocable to the seller/buyer of the obligation.

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

The information provided may be different for covered and noncovered securities. For

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

a description of covered securities, see the Instructions for Form 8949. For a taxable

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

covered security acquired with acquisition premium, your payer may report either (1) a

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

net amount of OID that reflects the offset of OID by the amount of acquisition premium

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

amortization for the year or (2) a gross amount for both the OID and the acquisition

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

premium amortization for the year. For a noncovered security acquired with acquisition

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

premium, your payer is only required to report the gross amount of OID.

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

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

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

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

instrument during the year while held by you. For a taxable covered security,

identification number (ITIN), adoption taxpayer identification number (ATIN), or

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

employer identification number (EIN). However, the issuer has reported your

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

complete identification number to the IRS.

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

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

section 1276(b). Report the accrued market discount on your income tax return

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

as directed in the instructions for Form 1040 or 1040A.

You also may have a filing requirement. See the Instructions to Form 8938.

(Continued on the back of Copy 2)

Form 1099-Oid - Original Issue Discount - 2016 Page 5

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