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How To Fill Out A 1040ez Form

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How To Fill Out A 1040ez Form

How to fill out a 1040ez form 7. How to fill out a 1040ez form   How To Get Tax Help Table of Contents Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. How to fill out a 1040ez form Free help with your tax return. How to fill out a 1040ez form   You can get free help preparing your return nationwide from IRS-certified volunteers. How to fill out a 1040ez form The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. How to fill out a 1040ez form The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. How to fill out a 1040ez form Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. How to fill out a 1040ez form In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. How to fill out a 1040ez form To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. How to fill out a 1040ez form gov, download the IRS2Go app, or call 1-800-906-9887. How to fill out a 1040ez form   As part of the TCE program, AARP offers the Tax-Aide counseling program. How to fill out a 1040ez form To find the nearest AARP Tax-Aide site, visit AARP's website at www. How to fill out a 1040ez form aarp. How to fill out a 1040ez form org/money/taxaide or call 1-888-227-7669. How to fill out a 1040ez form For more information on these programs, go to IRS. How to fill out a 1040ez form gov and enter “VITA” in the search box. How to fill out a 1040ez form Internet. How to fill out a 1040ez form    IRS. How to fill out a 1040ez form gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. How to fill out a 1040ez form Download the free IRS2Go app from the iTunes app store or from Google Play. How to fill out a 1040ez form Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. How to fill out a 1040ez form Check the status of your 2013 refund with the Where's My Refund? application on IRS. How to fill out a 1040ez form gov or download the IRS2Go app and select the Refund Status option. How to fill out a 1040ez form The IRS issues more than 9 out of 10 refunds in less than 21 days. How to fill out a 1040ez form Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. How to fill out a 1040ez form You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. How to fill out a 1040ez form The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. How to fill out a 1040ez form Use the Interactive Tax Assistant (ITA) to research your tax questions. How to fill out a 1040ez form No need to wait on the phone or stand in line. How to fill out a 1040ez form The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. How to fill out a 1040ez form When you reach the response screen, you can print the entire interview and the final response for your records. How to fill out a 1040ez form New subject areas are added on a regular basis. How to fill out a 1040ez form  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. How to fill out a 1040ez form gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. How to fill out a 1040ez form You can use the IRS Tax Map, to search publications and instructions by topic or keyword. How to fill out a 1040ez form The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. How to fill out a 1040ez form When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. How to fill out a 1040ez form Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. How to fill out a 1040ez form You can also ask the IRS to mail a return or an account transcript to you. How to fill out a 1040ez form Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. How to fill out a 1040ez form gov or by calling 1-800-908-9946. How to fill out a 1040ez form Tax return and tax account transcripts are generally available for the current year and the past three years. How to fill out a 1040ez form Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. How to fill out a 1040ez form Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. How to fill out a 1040ez form If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. How to fill out a 1040ez form Check the status of your amended return using Where's My Amended Return? Go to IRS. How to fill out a 1040ez form gov and enter Where's My Amended Return? in the search box. How to fill out a 1040ez form You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. How to fill out a 1040ez form It can take up to 3 weeks from the date you mailed it to show up in our system. How to fill out a 1040ez form Make a payment using one of several safe and convenient electronic payment options available on IRS. How to fill out a 1040ez form gov. How to fill out a 1040ez form Select the Payment tab on the front page of IRS. How to fill out a 1040ez form gov for more information. How to fill out a 1040ez form Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. How to fill out a 1040ez form Figure your income tax withholding with the IRS Withholding Calculator on IRS. How to fill out a 1040ez form gov. How to fill out a 1040ez form Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. How to fill out a 1040ez form Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. How to fill out a 1040ez form gov. How to fill out a 1040ez form Request an Electronic Filing PIN by going to IRS. How to fill out a 1040ez form gov and entering Electronic Filing PIN in the search box. How to fill out a 1040ez form Download forms, instructions and publications, including accessible versions for people with disabilities. How to fill out a 1040ez form Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. How to fill out a 1040ez form gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. How to fill out a 1040ez form An employee can answer questions about your tax account or help you set up a payment plan. How to fill out a 1040ez form Before you visit, check the Office Locator on IRS. How to fill out a 1040ez form gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. How to fill out a 1040ez form If you have a special need, such as a disability, you can request an appointment. How to fill out a 1040ez form Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. How to fill out a 1040ez form Apply for an Employer Identification Number (EIN). How to fill out a 1040ez form Go to IRS. How to fill out a 1040ez form gov and enter Apply for an EIN in the search box. How to fill out a 1040ez form Read the Internal Revenue Code, regulations, or other official guidance. How to fill out a 1040ez form Read Internal Revenue Bulletins. How to fill out a 1040ez form Sign up to receive local and national tax news and more by email. How to fill out a 1040ez form Just click on “subscriptions” above the search box on IRS. How to fill out a 1040ez form gov and choose from a variety of options. How to fill out a 1040ez form Phone. How to fill out a 1040ez form    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. How to fill out a 1040ez form Download the free IRS2Go app from the iTunes app store or from Google Play. How to fill out a 1040ez form Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. How to fill out a 1040ez form gov, or download the IRS2Go app. How to fill out a 1040ez form Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. How to fill out a 1040ez form The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. How to fill out a 1040ez form Most VITA and TCE sites offer free electronic filing. How to fill out a 1040ez form Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. How to fill out a 1040ez form Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. How to fill out a 1040ez form Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. How to fill out a 1040ez form If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. How to fill out a 1040ez form The IRS issues more than 9 out of 10 refunds in less than 21 days. How to fill out a 1040ez form Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. How to fill out a 1040ez form Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. How to fill out a 1040ez form The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. How to fill out a 1040ez form Note, the above information is for our automated hotline. How to fill out a 1040ez form Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. How to fill out a 1040ez form Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. How to fill out a 1040ez form You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. How to fill out a 1040ez form It can take up to 3 weeks from the date you mailed it to show up in our system. How to fill out a 1040ez form Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). How to fill out a 1040ez form You should receive your order within 10 business days. How to fill out a 1040ez form Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. How to fill out a 1040ez form If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. How to fill out a 1040ez form Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. How to fill out a 1040ez form The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. How to fill out a 1040ez form These individuals can also contact the IRS through relay services such as the Federal Relay Service. How to fill out a 1040ez form Walk-in. How to fill out a 1040ez form   You can find a selection of forms, publications and services — in-person. How to fill out a 1040ez form Products. How to fill out a 1040ez form You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. How to fill out a 1040ez form Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. How to fill out a 1040ez form Services. How to fill out a 1040ez form You can walk in to your local TAC for face-to-face tax help. How to fill out a 1040ez form An employee can answer questions about your tax account or help you set up a payment plan. How to fill out a 1040ez form Before visiting, use the Office Locator tool on IRS. How to fill out a 1040ez form gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. How to fill out a 1040ez form Mail. How to fill out a 1040ez form   You can send your order for forms, instructions, and publications to the address below. How to fill out a 1040ez form You should receive a response within 10 business days after your request is received. How to fill out a 1040ez form Internal Revenue Service 1201 N. How to fill out a 1040ez form Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. How to fill out a 1040ez form The Taxpayer Advocate Service (TAS) is your voice at the IRS. How to fill out a 1040ez form Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. How to fill out a 1040ez form   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. How to fill out a 1040ez form We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. How to fill out a 1040ez form You face (or your business is facing) an immediate threat of adverse action. How to fill out a 1040ez form You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. How to fill out a 1040ez form   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. How to fill out a 1040ez form Here's why we can help: TAS is an independent organization within the IRS. How to fill out a 1040ez form Our advocates know how to work with the IRS. How to fill out a 1040ez form Our services are free and tailored to meet your needs. How to fill out a 1040ez form We have offices in every state, the District of Columbia, and Puerto Rico. How to fill out a 1040ez form   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. How to fill out a 1040ez form   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. How to fill out a 1040ez form If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. How to fill out a 1040ez form Low Income Taxpayer Clinics. How to fill out a 1040ez form   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. How to fill out a 1040ez form Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. How to fill out a 1040ez form Visit www. How to fill out a 1040ez form TaxpayerAdvocate. How to fill out a 1040ez form irs. How to fill out a 1040ez form gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. How to fill out a 1040ez form Prev  Up  Next   Home   More Online Publications
 
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Page Last Reviewed or Updated: 11-Mar-2014

The How To Fill Out A 1040ez Form

How to fill out a 1040ez form Publication 1212 - Main Content Table of Contents Definitions Debt Instruments on the OID List Debt Instruments Not on the OID List Information for Brokers and Other MiddlemenShort-Term Obligations Redeemed at Maturity Long-Term Debt Instruments Certificates of Deposit Bearer Bonds and Coupons Backup Withholding Information for Owners of OID Debt InstrumentsExceptions. How to fill out a 1040ez form Adjustment for premium. How to fill out a 1040ez form Adjustment for acquisition premium. How to fill out a 1040ez form Adjustment for market discount. How to fill out a 1040ez form Form 1099-OID How To Report OID Figuring OID on Long-Term Debt Instruments Figuring OID on Stripped Bonds and Coupons How To Get Tax HelpLow Income Taxpayer Clinics Definitions The following terms are used throughout this publication. How to fill out a 1040ez form “Original issue discount” is defined first. How to fill out a 1040ez form The other terms are listed alphabetically. How to fill out a 1040ez form Original issue discount (OID). How to fill out a 1040ez form   OID is a form of interest. How to fill out a 1040ez form It is the excess of a debt instrument's stated redemption price at maturity over its issue price (acquisition price for a stripped bond or coupon). How to fill out a 1040ez form Zero coupon bonds and debt instruments that pay no stated interest until maturity are examples of debt instruments that have OID. How to fill out a 1040ez form Accrual period. How to fill out a 1040ez form   An accrual period is an interval of time used to measure OID. How to fill out a 1040ez form The length of an accrual period can be 6 months, a year, or some other period, depending on when the debt instrument was issued. How to fill out a 1040ez form Acquisition premium. How to fill out a 1040ez form   Acquisition premium is the excess of a debt instrument's adjusted basis immediately after purchase, including purchase at original issue, over the debt instrument's adjusted issue price at that time. How to fill out a 1040ez form A debt instrument does not have acquisition premium, however, if the debt instrument was purchased at a premium. How to fill out a 1040ez form See Premium, later. How to fill out a 1040ez form Adjusted issue price. How to fill out a 1040ez form   The adjusted issue price of a debt instrument at the beginning of an accrual period is used to figure the OID allocable to that period. How to fill out a 1040ez form In general, the adjusted issue price at the beginning of the debt instrument's first accrual period is its issue price. How to fill out a 1040ez form The adjusted issue price at the beginning of any subsequent accrual period is the sum of the issue price and all the OID includible in income before that accrual period minus any payment previously made on the debt instrument, other than a payment of qualified stated interest. How to fill out a 1040ez form Debt instrument. How to fill out a 1040ez form   The term “debt instrument” means any instrument or contractual arrangement that constitutes indebtedness under general principles of federal income tax law (including, for example, a bond, debenture, note, certificate, or other evidence of indebtedness). How to fill out a 1040ez form It generally does not include an annuity contract. How to fill out a 1040ez form Issue price. How to fill out a 1040ez form   For debt instruments listed in Section I-A and Section I-B, the issue price generally is the initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of these instruments was sold. How to fill out a 1040ez form Market discount. How to fill out a 1040ez form   Market discount arises when a debt instrument purchased in the secondary market has decreased in value since its issue date, generally because of an increase in interest rates. How to fill out a 1040ez form An OID debt instrument has market discount if your adjusted basis in the debt instrument immediately after you acquired it (usually its purchase price) was less than the debt instrument's issue price plus the total OID that accrued before you acquired it. How to fill out a 1040ez form The market discount is the difference between the issue price plus accrued OID and your adjusted basis. How to fill out a 1040ez form Premium. How to fill out a 1040ez form   A debt instrument is purchased at a premium if its adjusted basis immediately after purchase is greater than the total of all amounts payable on the debt instrument after the purchase date, other than qualified stated interest. How to fill out a 1040ez form The premium is the excess of the adjusted basis over the payable amounts. How to fill out a 1040ez form See Publication 550 for information on the tax treatment of bond premium. How to fill out a 1040ez form Qualified stated interest. How to fill out a 1040ez form   In general, qualified stated interest is stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually over the term of the debt instrument at a single fixed rate. How to fill out a 1040ez form Stated redemption price at maturity. How to fill out a 1040ez form   A debt instrument's stated redemption price at maturity is the sum of all amounts (principal and interest) payable on the debt instrument other than qualified stated interest. How to fill out a 1040ez form Yield to maturity (YTM). How to fill out a 1040ez form   In general, the YTM is the discount rate that, when used in figuring the present value of all principal and interest payments, produces an amount equal to the issue price of the debt instrument. How to fill out a 1040ez form The YTM is generally shown on the face of the debt instrument or in the literature you receive from your broker. How to fill out a 1040ez form If you do not have this information, consult your broker, tax advisor, or the issuer. How to fill out a 1040ez form Debt Instruments on the OID List The OID list on the IRS website can be used by brokers and other middlemen to prepare information returns. How to fill out a 1040ez form If you own a listed debt instrument, you generally should not rely on the information in the OID list to determine (or compare) the OID to be reported on your tax return. How to fill out a 1040ez form The OID amounts listed are figured without reference to the price or date at which you acquired the debt instrument. How to fill out a 1040ez form For information about determining the OID to be reported on your tax return, see the instructions for figuring OID under Information for Owners of OID Debt Instruments, later. How to fill out a 1040ez form The following discussions explain what information is contained in each section of the list. How to fill out a 1040ez form Section I. How to fill out a 1040ez form   This section contains publicly offered, long-term debt instruments. How to fill out a 1040ez form Section I-A: Corporate Debt Instruments Issued Before 1985. How to fill out a 1040ez form Section I-B: Corporate Debt Instruments Issued After 1984. How to fill out a 1040ez form Section I-C: Inflation-Indexed Debt Instruments. How to fill out a 1040ez form For each publicly offered debt instrument in Section I, the list contains the following information. How to fill out a 1040ez form The name of the issuer. How to fill out a 1040ez form The Committee on Uniform Security Identification Procedures (CUSIP) number. How to fill out a 1040ez form The issue date. How to fill out a 1040ez form The maturity date. How to fill out a 1040ez form The issue price expressed as a percent of principal or of stated redemption price at maturity. How to fill out a 1040ez form The annual stated or coupon interest rate. How to fill out a 1040ez form (This rate is shown as 0. How to fill out a 1040ez form 00 if no annual interest payments are provided. How to fill out a 1040ez form ) The yield to maturity will be added to Section I-B for bonds issued after December 31, 2006. How to fill out a 1040ez form The total OID accrued up to January 1 of a calendar year. How to fill out a 1040ez form (This information is not available for every instrument. How to fill out a 1040ez form ) For long-term debt instruments issued after July 1, 1982, the daily OID for the accrual periods falling in a calendar year and a subsequent year. How to fill out a 1040ez form The total OID per $1,000 of principal or maturity value for a calendar year and a subsequent year. How to fill out a 1040ez form Section II. How to fill out a 1040ez form   This section contains stripped coupons and principal components of U. How to fill out a 1040ez form S. How to fill out a 1040ez form Treasury and Government-Sponsored Enterprise debt instruments. How to fill out a 1040ez form These stripped components are available through the Department of the Treasury's Separate Trading of Registered Interest and Principal of Securities (STRIPS) program and government-sponsored enterprises such as the Resolution Funding Corporation. How to fill out a 1040ez form This section also includes debt instruments backed by U. How to fill out a 1040ez form S. How to fill out a 1040ez form Treasury securities that represent ownership interests in those securities. How to fill out a 1040ez form   The obligations listed in Section II are arranged by maturity date. How to fill out a 1040ez form The amounts listed are the total OID for a calendar year per $1,000 of redemption price. How to fill out a 1040ez form Section III. How to fill out a 1040ez form   This section contains short-term discount obligations. How to fill out a 1040ez form Section III-A: Short-Term U. How to fill out a 1040ez form S. How to fill out a 1040ez form Treasury Bills. How to fill out a 1040ez form Section III-B: Federal Home Loan Banks. How to fill out a 1040ez form Section III-C: Federal National Mortgage Association. How to fill out a 1040ez form Section III-D: Federal Farm Credit Banks. How to fill out a 1040ez form Section III-E: Federal Home Loan Mortgage Corporation. How to fill out a 1040ez form Section III-F: Federal Agricultural Mortgage Corporation. How to fill out a 1040ez form    Information that supplements Section III-A is available on the Internet at http://www. How to fill out a 1040ez form treasurydirect. How to fill out a 1040ez form gov/tdhome. How to fill out a 1040ez form htm. How to fill out a 1040ez form   The short-term obligations listed in this section are arranged by maturity date. How to fill out a 1040ez form For each obligation, the list contains the CUSIP number, maturity date, issue date, issue price (expressed as a percent of principal), and discount to be reported as interest for a calendar year per $1,000 of redemption price. How to fill out a 1040ez form Brokers and other middlemen should rely on the issue price information in Section III only if they are unable to determine the price actually paid by the owner. How to fill out a 1040ez form Debt Instruments Not on the OID List The list of debt instruments discussed earlier does not contain the following items. How to fill out a 1040ez form U. How to fill out a 1040ez form S. How to fill out a 1040ez form savings bonds. How to fill out a 1040ez form Certificates of deposit and other face-amount certificates issued at a discount, including syndicated certificates of deposit. How to fill out a 1040ez form Obligations issued by tax-exempt organizations. How to fill out a 1040ez form OID debt instruments that matured or were entirely called by the issuer before the tables were posted on the IRS website. How to fill out a 1040ez form Mortgage-backed securities and mortgage participation certificates. How to fill out a 1040ez form Long-term OID debt instruments issued before May 28, 1969. How to fill out a 1040ez form Short-term obligations, other than the obligations listed in Section III. How to fill out a 1040ez form Debt instruments issued at a discount by states or their political subdivisions. How to fill out a 1040ez form REMIC regular interests and CDOs. How to fill out a 1040ez form Commercial paper and banker's acceptances issued at a discount. How to fill out a 1040ez form Obligations issued at a discount by individuals. How to fill out a 1040ez form Foreign obligations not traded in the United States and obligations not issued in the United States. How to fill out a 1040ez form Information for Brokers and Other Middlemen The following discussions contain specific instructions for brokers and middlemen who hold or redeem a debt instrument for the owner. How to fill out a 1040ez form In general, you must file a Form 1099 for the debt instrument if the interest or OID to be included in the owner's income for a calendar year totals $10 or more. How to fill out a 1040ez form You also must file a Form 1099 if you were required to deduct and withhold tax, even if the interest or OID is less than $10. How to fill out a 1040ez form See Backup Withholding, later. How to fill out a 1040ez form If you must file a Form 1099, furnish a copy to the owner of the debt instrument by January 31 in the year it is due. How to fill out a 1040ez form File all your Forms 1099 with the IRS, accompanied by Form 1096, by February 28 in the year it is due (March 31 if you file electronically). How to fill out a 1040ez form Electronic payee statements. How to fill out a 1040ez form   You can issue Form 1099-OID electronically with the consent of the recipient. How to fill out a 1040ez form More information. How to fill out a 1040ez form   For more information, including penalties for failure to file (or furnish) required information returns or statements, see the General Instructions for Certain Information Returns (Forms 1098, 1099, 3921, 3922, 5498, and W-2G) for the appropriate calendar year. How to fill out a 1040ez form Short-Term Obligations Redeemed at Maturity If you redeem a short-term discount obligation for the owner at maturity, you must report the discount as interest on Form 1099-INT. How to fill out a 1040ez form To figure the discount, use the purchase price shown on the owner's copy of the purchase confirmation receipt or similar record, or the price shown in your transaction records. How to fill out a 1040ez form If you sell the obligation for the owner before maturity, you must file Form 1099-B to reflect the gross proceeds to the seller. How to fill out a 1040ez form Do not report the accrued discount to the date of sale on either Form 1099-INT or Form 1099-OID. How to fill out a 1040ez form If the owner's purchase price cannot be determined, figure the discount as if the owner had purchased the obligation at its original issue price. How to fill out a 1040ez form A special rule is used to determine the original issue price for information reporting on U. How to fill out a 1040ez form S. How to fill out a 1040ez form Treasury bills (T-bills) listed in Section III-A. How to fill out a 1040ez form Under this rule, you treat as the original issue price of the T-bill the noncompetitive (weighted average of accepted auction bids) discount price for the longest-maturity T-bill maturing on the same date as the T-bill being redeemed. How to fill out a 1040ez form This noncompetitive discount price is the issue price (expressed as a percent of principal) shown in Section III-A. How to fill out a 1040ez form A similar rule is used to figure the discount on short-term discount obligations issued by the organizations listed in Section III-B through Section III-F. How to fill out a 1040ez form Example 1. How to fill out a 1040ez form There are 13-week and 26-week T-bills maturing on the same date as the T-bill being redeemed. How to fill out a 1040ez form The price actually paid by the owner cannot be established by owner or middleman records. How to fill out a 1040ez form You treat as the issue price of the T-bill the noncompetitive discount price (expressed as a percent of principal) shown in Section III-A for a 26-week bill maturing on the same date as the T-bill redeemed. How to fill out a 1040ez form The interest you report on Form 1099-INT is the OID (per $1,000 of principal) shown in Section III-A for that obligation. How to fill out a 1040ez form Long-Term Debt Instruments If you hold a long-term OID debt instrument as a nominee for the true owner, you generally must file Form 1099-OID. How to fill out a 1040ez form For this purpose, you can rely on Section I of the OID list to determine the following information. How to fill out a 1040ez form Whether a debt instrument has OID. How to fill out a 1040ez form The OID to be reported on the Form 1099-OID. How to fill out a 1040ez form In general, you must report OID on publicly offered, long-term debt instruments listed in Section I. How to fill out a 1040ez form You also can report OID on other long-term debt instruments. How to fill out a 1040ez form Form 1099-OID. How to fill out a 1040ez form   On Form 1099-OID for a calendar year show the following information. How to fill out a 1040ez form Box 1. How to fill out a 1040ez form The OID for the actual dates the owner held the debt instruments during a calendar year. How to fill out a 1040ez form To determine this amount, see Figuring OID, next. How to fill out a 1040ez form Box 2. How to fill out a 1040ez form The qualified stated interest paid or credited during the calendar year. How to fill out a 1040ez form Interest reported here is not reported on Form 1099-INT. How to fill out a 1040ez form The qualified stated interest on Treasury inflation-protected securities may be reported on Form 1099-INT in box 3 instead. How to fill out a 1040ez form Box 3. How to fill out a 1040ez form Any interest or principal forfeited because of an early withdrawal that the owner can deduct from gross income. How to fill out a 1040ez form Do not reduce the amounts in boxes 1 and 2 by the forfeiture. How to fill out a 1040ez form Box 4. How to fill out a 1040ez form Any backup withholding for this debt instrument. How to fill out a 1040ez form Box 7. How to fill out a 1040ez form The CUSIP number, if any. How to fill out a 1040ez form If there is no CUSIP number, give a description of the debt instrument, including the abbreviation for the stock exchange, the abbreviation used by the stock exchange for the issuer, the coupon rate, and the year of maturity (for example, NYSE XYZ 12. How to fill out a 1040ez form 50 2006). How to fill out a 1040ez form If the issuer of the debt instrument is other than the payer, show the name of the issuer in this box. How to fill out a 1040ez form Box 8. How to fill out a 1040ez form The OID on a U. How to fill out a 1040ez form S. How to fill out a 1040ez form Treasury obligation for the part of the year the owner held the debt instrument. How to fill out a 1040ez form Box 9. How to fill out a 1040ez form Investment expenses passed on to holders of a single-class REMIC. How to fill out a 1040ez form Boxes 10-12. How to fill out a 1040ez form Use to report any state income tax withheld for this debt instrument. How to fill out a 1040ez form Figuring OID. How to fill out a 1040ez form   You can determine the OID on a long-term debt instrument by using either of the following. How to fill out a 1040ez form Section I of the OID list. How to fill out a 1040ez form The income tax regulations. How to fill out a 1040ez form Using Section I. How to fill out a 1040ez form   If the owner held the debt instrument for the entire calendar year, report the OID shown in Section I for the calendar year. How to fill out a 1040ez form Because OID is listed for each $1,000 of stated redemption price at maturity, you must adjust the listed amount to reflect the debt instrument's actual stated redemption price at maturity. How to fill out a 1040ez form For example, if the debt instrument's stated redemption price at maturity is $500, report one-half the listed OID. How to fill out a 1040ez form   If the owner held the debt instrument for less than the entire calendar year, figure the OID to report as follows. How to fill out a 1040ez form Look up the daily OID for the first accrual period in the calendar year during which the owner held the debt instrument. How to fill out a 1040ez form Multiply the daily OID by the number of days the owner held the debt instrument during that accrual period. How to fill out a 1040ez form Repeat steps (1) and (2) for any remaining accrual periods for the year during which the owner held the debt instrument. How to fill out a 1040ez form Add the results in steps (2) and (3) to determine the owner's OID per $1,000 of stated redemption price at maturity. How to fill out a 1040ez form If necessary, adjust the OID in (4) to reflect the debt instrument's stated redemption price at maturity. How to fill out a 1040ez form Report the result on Form 1099-OID in box 1. How to fill out a 1040ez form Using the income tax regulations. How to fill out a 1040ez form   Instead of using Section I to figure OID, you can use the regulations under sections 1272 through 1275 of the Internal Revenue Code. How to fill out a 1040ez form For example, under the regulations, you can use monthly accrual periods in figuring OID for a debt instrument issued after April 3, 1994, that provides for monthly payments. How to fill out a 1040ez form (If you use Section I-B, the OID is figured using 6-month accrual periods. How to fill out a 1040ez form )   For a general explanation of the rules for figuring OID under the regulations, see Figuring OID on Long-Term Debt Instruments under Information for Owners of OID Debt Instruments, later. How to fill out a 1040ez form Certificates of Deposit If you hold a bank certificate of deposit (CD) as a nominee, you must determine whether the CD has OID and any OID includible in the income of the owner. How to fill out a 1040ez form You must file an information return showing the reportable interest and OID, if any, on the CD. How to fill out a 1040ez form These rules apply whether or not you sold the CD to the owner. How to fill out a 1040ez form Report OID on a CD in the same way as OID on other debt instruments. How to fill out a 1040ez form See Short-Term Obligations Redeemed at Maturity and Long-Term Debt Instruments, earlier. How to fill out a 1040ez form Bearer Bonds and Coupons If a coupon from a bearer bond is presented to you for collection before the bond matures, you generally must report the interest on Form 1099-INT. How to fill out a 1040ez form However, do not report the interest if either of the following apply. How to fill out a 1040ez form You hold the bond as a nominee for the true owner. How to fill out a 1040ez form The payee is a foreign person. How to fill out a 1040ez form See Payments to foreign person under Backup Withholding, later. How to fill out a 1040ez form Because you cannot assume the presenter of the coupon also owns the bond, you should not report OID on the bond on Form 1099-OID. How to fill out a 1040ez form The coupon may have been “stripped” (separated) from the bond and separately purchased. How to fill out a 1040ez form However, if a long-term bearer bond on the OID list is presented to you for redemption upon call or maturity, you should prepare a Form 1099-OID showing the OID for that calendar year, as well as any coupon interest payments collected at the time of redemption. How to fill out a 1040ez form Backup Withholding If you report OID on Form 1099-OID or interest on Form 1099-INT for a calendar year, you may be required to apply backup withholding to the reportable payment at a rate of 28%. How to fill out a 1040ez form The backup withholding is deducted at the time a cash payment is made. How to fill out a 1040ez form See Pub. How to fill out a 1040ez form 1281, Backup Withholding for Missing and Incorrect Name/TIN(s), for more information. How to fill out a 1040ez form Backup withholding generally applies in the following situations. How to fill out a 1040ez form The payee does not give you a taxpayer identification number (TIN). How to fill out a 1040ez form The IRS notifies you that the payee gave an incorrect TIN. How to fill out a 1040ez form The IRS notifies you that the payee is subject to backup withholding due to payee underreporting. How to fill out a 1040ez form For debt instruments acquired after 1983: The payee does not certify, under penalties of perjury, that he or she is not subject to backup withholding under (3), or The payee does not certify, under penalties of perjury, that the TIN given is correct. How to fill out a 1040ez form However, for short-term discount obligations (other than government obligations), bearer bonds and coupons, and U. How to fill out a 1040ez form S. How to fill out a 1040ez form savings bonds, backup withholding applies only if the payee does not give you a TIN or gives you an obviously incorrect number for a TIN. How to fill out a 1040ez form Short-term obligations. How to fill out a 1040ez form   Backup withholding applies to OID on a short-term obligation only when the OID is paid at maturity. How to fill out a 1040ez form However, backup withholding applies to any interest payable before maturity when the interest is paid or credited. How to fill out a 1040ez form   If the owner of a short-term obligation at maturity is not the original owner and can establish the purchase price of the obligation, the amount subject to backup withholding must be determined by treating the purchase price as the issue price. How to fill out a 1040ez form However, you can choose to disregard that price if it would require significant manual intervention in the computer or recordkeeping system used for the obligation. How to fill out a 1040ez form If the purchase price of a listed obligation is not established or is disregarded, you must use the issue price shown in Section III. How to fill out a 1040ez form Long-term obligations. How to fill out a 1040ez form   If no cash payments are made on a long-term obligation before maturity, backup withholding applies only at maturity. How to fill out a 1040ez form The amount subject to backup withholding is the OID includible in the owner's gross income for the calendar year when the obligation matures. How to fill out a 1040ez form The amount to be withheld is limited to the cash paid. How to fill out a 1040ez form Registered long-term obligations with cash payments. How to fill out a 1040ez form   If a registered long-term obligation has cash payments before maturity, backup withholding applies when a cash payment is made. How to fill out a 1040ez form The amount subject to backup withholding is the total of the qualified stated interest (defined earlier under Definitions) and OID includible in the owner's gross income for the calendar year when the payment is made. How to fill out a 1040ez form If more than one cash payment is made during the year, the OID subject to withholding for the year must be allocated among the expected cash payments in the ratio that each bears to the total of the expected cash payments. How to fill out a 1040ez form For any payment, the required withholding is limited to the cash paid. How to fill out a 1040ez form Payee not the original owner. How to fill out a 1040ez form   If the payee is not the original owner of the obligation, the OID subject to backup withholding is the OID includible in the gross income of all owners during the calendar year (without regard to any amount paid by the new owner at the time of transfer). How to fill out a 1040ez form The amount subject to backup withholding at maturity of a listed obligation must be determined using the issue price shown in Section I. How to fill out a 1040ez form Bearer long-term obligations with cash payments. How to fill out a 1040ez form   If a bearer long-term obligation has cash payments before maturity, backup withholding applies when the cash payments are made. How to fill out a 1040ez form For payments before maturity, the amount subject to withholding is the qualified stated interest (defined earlier under Definitions) includible in the owner's gross income for the calendar year. How to fill out a 1040ez form For a payment at maturity, the amount subject to withholding is only the total of any qualified stated interest paid at maturity and the OID includible in the owner's gross income for the calendar year when the obligation matures. How to fill out a 1040ez form The required withholding at maturity is limited to the cash paid. How to fill out a 1040ez form Sales and redemptions. How to fill out a 1040ez form   If you report the gross proceeds from a sale, exchange, or redemption of a debt instrument on Form 1099-B for a calendar year, you may be required to withhold 28% of the amount reported. How to fill out a 1040ez form Backup withholding applies in the following situations. How to fill out a 1040ez form The payee does not give you a TIN. How to fill out a 1040ez form The IRS notifies you that the payee gave an incorrect TIN. How to fill out a 1040ez form For debt instruments held in an account opened after 1983, the payee does not certify, under penalties of perjury, that the TIN given is correct. How to fill out a 1040ez form Payments outside the United States to U. How to fill out a 1040ez form S. How to fill out a 1040ez form person. How to fill out a 1040ez form   The requirements for backup withholding and information reporting apply to payments of OID and interest made outside the United States to a U. How to fill out a 1040ez form S. How to fill out a 1040ez form person, a controlled foreign corporation, or a foreign person at least 50% of whose income for the preceding 3-year period is effectively connected with the conduct of a U. How to fill out a 1040ez form S. How to fill out a 1040ez form trade or business. How to fill out a 1040ez form Payments to foreign person. How to fill out a 1040ez form   The following discussions explain the rules for backup withholding and information reporting on payments to foreign persons. How to fill out a 1040ez form U. How to fill out a 1040ez form S. How to fill out a 1040ez form -source amount. How to fill out a 1040ez form   Backup withholding and information reporting are not required for payments of U. How to fill out a 1040ez form S. How to fill out a 1040ez form -source OID, interest, or proceeds from a sale or redemption of an OID instrument if the payee has given you proof (generally the appropriate Form W-8 or an acceptable substitute) that the payee is a foreign person. How to fill out a 1040ez form A U. How to fill out a 1040ez form S. How to fill out a 1040ez form resident is not a foreign person. How to fill out a 1040ez form For proof of the payee's foreign status, you can rely on the appropriate Form W-8 or on documentary evidence for payments made outside the United States to an offshore account or, in case of broker proceeds, a sale effected outside the United States. How to fill out a 1040ez form Receipt of the appropriate Form W-8 does not relieve you from information reporting and backup withholding if you actually know the payee is a U. How to fill out a 1040ez form S. How to fill out a 1040ez form person. How to fill out a 1040ez form   For information about the 28% withholding tax that may apply to payments of U. How to fill out a 1040ez form S. How to fill out a 1040ez form -source OID or interest to foreign persons, see Publication 515. How to fill out a 1040ez form Foreign-source amount. How to fill out a 1040ez form   Backup withholding and information reporting are not required for payments of foreign-source OID and interest made outside the United States. How to fill out a 1040ez form However, if the payments are made inside the United States, the requirements for backup withholding and information reporting will apply unless the payee has given you the appropriate Form W-8 or acceptable substitute as proof that the payee is a foreign person. How to fill out a 1040ez form More information. How to fill out a 1040ez form   For more information about backup withholding and information reporting on foreign-source amounts or payments to foreign persons, see Regulations section 1. How to fill out a 1040ez form 6049-5. How to fill out a 1040ez form Information for Owners of OID Debt Instruments This section is for persons who prepare their own tax returns. How to fill out a 1040ez form It discusses the income tax rules for figuring and reporting OID on long-term debt instruments. How to fill out a 1040ez form It also includes a similar discussion for stripped bonds and coupons, such as zero coupon bonds available through the Department of the Treasury's STRIPS program and government-sponsored enterprises such as the Resolution Funding Corporation. How to fill out a 1040ez form However, the information provided does not cover every situation. How to fill out a 1040ez form More information can be found in the regulations under sections 1271 through 1275 of the Internal Revenue Code. How to fill out a 1040ez form Including OID in income. How to fill out a 1040ez form   Generally, you include OID in income as it accrues each year, whether or not you receive any payments from the debt instrument issuer. How to fill out a 1040ez form Exceptions. How to fill out a 1040ez form   The rules for including OID in income as it accrues generally do not apply to the following debt instruments. How to fill out a 1040ez form U. How to fill out a 1040ez form S. How to fill out a 1040ez form savings bonds. How to fill out a 1040ez form Tax-exempt obligations. How to fill out a 1040ez form (However, see Tax-Exempt Bonds and Coupons, later. How to fill out a 1040ez form ) Obligations issued by individuals before March 2, 1984. How to fill out a 1040ez form Loans of $10,000 or less between individuals who are not in the business of lending money. How to fill out a 1040ez form (The dollar limit includes outstanding prior loans by the lender to the borrower. How to fill out a 1040ez form ) This exception does not apply if a principal purpose of the loan is to avoid any federal tax. How to fill out a 1040ez form   See chapter 1 of Publication 550 for information about the rules for these and other types of discounted debt instruments, such as short-term and market discount obligations. How to fill out a 1040ez form Publication 550 also discusses rules for holders of REMIC interests and CDOs. How to fill out a 1040ez form De minimis rule. How to fill out a 1040ez form   You can treat OID as zero if the total OID on a debt instrument is less than one-fourth of 1% (. How to fill out a 1040ez form 0025) of the stated redemption price at maturity multiplied by the number of full years from the date of original issue to maturity. How to fill out a 1040ez form Debt instruments with de minimis OID are not listed in this publication. How to fill out a 1040ez form There are special rules to determine the de minimis amount in the case of debt instruments that provide for more than one payment of principal. How to fill out a 1040ez form Also, the de minimis rules generally do not apply to tax-exempt obligations. How to fill out a 1040ez form Example 2. How to fill out a 1040ez form You bought at issuance a 10-year debt instrument with a stated redemption price at maturity of $1,000, issued at $980 with OID of $20. How to fill out a 1040ez form One-fourth of 1% of $1,000 (the stated redemption price) times 10 (the number of full years from the date of original issue to maturity) equals $25. How to fill out a 1040ez form Under the de minimis rule, you can treat the OID as zero because the $20 discount is less than $25. How to fill out a 1040ez form Example 3. How to fill out a 1040ez form Assume the same facts as Example 2, except the debt instrument was issued at $950. How to fill out a 1040ez form You must report part of the $50 OID each year because it is more than $25. How to fill out a 1040ez form Choice to report all interest as OID. How to fill out a 1040ez form   Generally, you can choose to treat all interest on a debt instrument acquired after April 3, 1994, as OID and include it in gross income by using the constant yield method. How to fill out a 1040ez form See Constant yield method under Debt Instruments Issued After 1984, later, for more information. How to fill out a 1040ez form   For this choice, interest includes stated interest, acquisition discount, OID, de minimis OID, market discount, de minimis market discount, and unstated interest, as adjusted by any amortizable bond premium or acquisition premium. How to fill out a 1040ez form For more information, see Regulations section 1. How to fill out a 1040ez form 1272-3. How to fill out a 1040ez form Purchase after date of original issue. How to fill out a 1040ez form   A debt instrument you purchased after the date of original issue may have premium, acquisition premium, or market discount. How to fill out a 1040ez form If so, the OID reported to you on Form 1099-OID may have to be adjusted. How to fill out a 1040ez form For more information, see Showing an OID adjustment under How To Report OID, later. How to fill out a 1040ez form The following rules generally do not apply to contingent payment debt instruments. How to fill out a 1040ez form Adjustment for premium. How to fill out a 1040ez form   If your debt instrument (other than an inflation-indexed debt instrument) has premium, do not report any OID as ordinary income. How to fill out a 1040ez form Your adjustment is the total OID shown on your Form 1099-OID. How to fill out a 1040ez form Adjustment for acquisition premium. How to fill out a 1040ez form   If your debt instrument has acquisition premium, reduce the OID you report. How to fill out a 1040ez form Your adjustment is the difference between the OID shown on your Form 1099-OID and the reduced OID amount figured using the rules explained later under Figuring OID on Long-Term Debt Instruments. How to fill out a 1040ez form Adjustment for market discount. How to fill out a 1040ez form   If your debt instrument has market discount that you choose to include in income currently, increase the OID you report. How to fill out a 1040ez form Your adjustment is the accrued market discount for the year. How to fill out a 1040ez form See Market Discount Bonds in chapter 1 of Publication 550 for information on how to figure accrued market discount and include it in your income currently and for other information about market discount bonds. How to fill out a 1040ez form If you choose to use the constant yield method to figure accrued market discount, also see Figuring OID on Long-Term Debt Instruments, later. How to fill out a 1040ez form The constant yield method of figuring accrued OID, explained in those discussions under Constant yield method, is also used to figure accrued market discount. How to fill out a 1040ez form For more information concerning premium or market discount on an inflation-indexed debt instrument, see Regulations section 1. How to fill out a 1040ez form 1275-7. How to fill out a 1040ez form Sale, exchange, or redemption. How to fill out a 1040ez form   Generally, you treat your gain or loss from the sale, exchange, or redemption of a discounted debt instrument as a capital gain or loss if you held the debt instrument as a capital asset. How to fill out a 1040ez form If you sold the debt instrument through a broker, you should receive Form 1099-B or an equivalent statement from the broker. How to fill out a 1040ez form Use the Form 1099-B or other statement and your brokerage statements to complete Form 8949, and Schedule D (Form 1040). How to fill out a 1040ez form   Your gain or loss is the difference between the amount you realized on the sale, exchange, or redemption and your basis in the debt instrument. How to fill out a 1040ez form Your basis, generally, is your cost increased by the OID you have included in income each year you held it. How to fill out a 1040ez form In general, to determine your gain or loss on a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. How to fill out a 1040ez form   See chapter 4 of Publication 550 for more information about the tax treatment of the sale or redemption of discounted debt instruments. How to fill out a 1040ez form Example 4. How to fill out a 1040ez form Larry, a calendar year taxpayer, bought a corporate debt instrument at original issue for $86,235. How to fill out a 1040ez form 00 on November 1 of Year 1. How to fill out a 1040ez form The 15-year debt instrument matures on October 31 of Year 16 at a stated redemption price of $100,000. How to fill out a 1040ez form The debt instrument provides for semiannual payments of interest at 10%. How to fill out a 1040ez form Assume the debt instrument is a capital asset in Larry's hands. How to fill out a 1040ez form The debt instrument has $13,765. How to fill out a 1040ez form 00 of OID ($100,000 stated redemption price at maturity minus $86,235. How to fill out a 1040ez form 00 issue price). How to fill out a 1040ez form Larry sold the debt instrument for $90,000 on November 1 of Year 4. How to fill out a 1040ez form Including the OID he will report for the period he held the debt instrument in Year 4, Larry has included $4,556. How to fill out a 1040ez form 00 of OID in income and has increased his basis by that amount to $90,791. How to fill out a 1040ez form 00. How to fill out a 1040ez form Larry has realized a loss of $791. How to fill out a 1040ez form 00. How to fill out a 1040ez form All of Larry's loss is capital loss. How to fill out a 1040ez form Form 1099-OID The issuer of the debt instrument (or your broker, if you purchased or held the debt instrument through a broker) should give you a copy of Form 1099-OID or a similar statement if the accrued OID for the calendar year is $10 or more and the term of the debt instrument is more than 1 year. How to fill out a 1040ez form Form 1099-OID shows all OID income in box 1 except OID on a U. How to fill out a 1040ez form S. How to fill out a 1040ez form Treasury obligation, which is shown in box 8. How to fill out a 1040ez form It also shows, in box 2, any qualified stated interest you must include in income. How to fill out a 1040ez form (However, any qualified stated interest on Treasury inflation-protected securities can be reported on Form 1099-INT in box 3. How to fill out a 1040ez form ) A copy of Form 1099-OID will be sent to the IRS. How to fill out a 1040ez form Do not attach your copy to your tax return. How to fill out a 1040ez form Keep it for your records. How to fill out a 1040ez form If you are required to file a tax return and you receive Form 1099-OID showing taxable amounts, you must report these amounts on your return. How to fill out a 1040ez form A 20% accuracy-related penalty may be charged for underpayment of tax due to either negligence or disregard of rules and regulations or substantial understatement of tax. How to fill out a 1040ez form Form 1099-OID not received. How to fill out a 1040ez form   If you held an OID debt instrument for a calendar year but did not receive a Form 1099-OID, refer to the discussions under Figuring OID on Long-Term Debt Instruments, later, for information on the OID you must report. How to fill out a 1040ez form Refiguring OID. How to fill out a 1040ez form   You must refigure the OID shown on Form 1099-OID, in box 1 or box 8, to determine the proper amount to include in income if one of the following applies. How to fill out a 1040ez form You bought the debt instrument at a premium or at an acquisition premium. How to fill out a 1040ez form The debt instrument is a stripped bond or coupon (including zero coupon bonds backed by U. How to fill out a 1040ez form S. How to fill out a 1040ez form Treasury securities). How to fill out a 1040ez form The debt instrument is a contingent payment or inflation-indexed debt instrument. How to fill out a 1040ez form See the discussions under Figuring OID on Long-Term Debt Instruments or Figuring OID on Stripped Bonds and Coupons, later, for the specific computations. How to fill out a 1040ez form Refiguring interest. How to fill out a 1040ez form   If you disposed of a debt instrument or acquired it from another holder between interest dates, see the discussion under Bonds Sold Between Interest Dates in chapter 1 of Publication 550 for information about refiguring the interest shown on Form 1099-OID in box 2. How to fill out a 1040ez form Nominee. How to fill out a 1040ez form   If you are the holder of an OID debt instrument and you receive a Form 1099-OID that shows your taxpayer identification number and includes amounts belonging to another person, you are considered a “nominee. How to fill out a 1040ez form ” You must file another Form 1099-OID for each actual owner, showing the OID for the owner. How to fill out a 1040ez form Show the owner of the debt instrument as the “recipient” and you as the “payer. How to fill out a 1040ez form ”   Complete Form 1099-OID and Form 1096 and file the forms with the Internal Revenue Service Center for your area. How to fill out a 1040ez form You must also give a copy of the Form 1099-OID to the actual owner. How to fill out a 1040ez form However, you are not required to file a nominee return to show amounts belonging to your spouse. How to fill out a 1040ez form See the Form 1099 instructions for more information. How to fill out a 1040ez form   When preparing your tax return, follow the instructions under Showing an OID adjustment in the next discussion. How to fill out a 1040ez form How To Report OID Generally, you report your taxable interest and OID income on the interest line of Form 1040EZ, Form 1040A, or Form 1040. How to fill out a 1040ez form Form 1040 or Form 1040A required. How to fill out a 1040ez form   You must use Form 1040 or Form 1040A (you cannot use Form 1040EZ) under either of the following conditions. How to fill out a 1040ez form You received a Form 1099-OID as a nominee for the actual owner. How to fill out a 1040ez form Your total interest and OID income for the year was more than $1,500. How to fill out a 1040ez form Form 1040 required. How to fill out a 1040ez form   You must use Form 1040 (you cannot use Form 1040A or Form 1040EZ) if you are reporting more or less OID than the amount shown on Form 1099-OID, other than because you are a nominee. How to fill out a 1040ez form For example, if you paid a premium or an acquisition premium when you purchased the debt instrument, you must use Form 1040 because you will report less OID than shown on Form 1099-OID. How to fill out a 1040ez form Also, you must use Form 1040 if you were charged an early withdrawal penalty. How to fill out a 1040ez form Where to report. How to fill out a 1040ez form   List each payer's name (if a brokerage firm gave you a Form 1099, list the brokerage firm as the payer) and the amount received from each payer on Form 1040A, Schedule B, Part I, line 1, or Form 1040, Schedule B, line 1. How to fill out a 1040ez form Include all OID and periodic interest shown on any Form 1099-OID, boxes 1, 2, and 8, you received for the tax year. How to fill out a 1040ez form Also include any other OID and interest income for which you did not receive a Form 1099. How to fill out a 1040ez form Showing an OID adjustment. How to fill out a 1040ez form   If you use Form 1040 to report more or less OID than shown on Form 1099-OID, list the full OID on Schedule B, Part I, line 1, and follow the instructions under 1 or 2, next. How to fill out a 1040ez form   If you use Form 1040A to report the OID shown on a Form 1099-OID you received as a nominee for the actual owner, list the full OID on Schedule B, Part I, line 1 and follow the instructions under 1. How to fill out a 1040ez form If the OID, as adjusted, is less than the amount shown on Form 1099-OID, show the adjustment as follows. How to fill out a 1040ez form Under your last entry on line 1, subtotal all interest and OID income listed on line 1. How to fill out a 1040ez form Below the subtotal, write “Nominee Distribution” or “OID Adjustment” and show the OID you are not required to report. How to fill out a 1040ez form Subtract that OID from the subtotal and enter the result on line 2. How to fill out a 1040ez form If the OID, as adjusted, is more than the amount shown on Form 1099-OID, show the adjustment as follows. How to fill out a 1040ez form Under your last entry on line 1, subtotal all interest and OID income listed on line 1. How to fill out a 1040ez form Below the subtotal, write “OID Adjustment” and show the additional OID. How to fill out a 1040ez form Add that OID to the subtotal and enter the result on line 2. How to fill out a 1040ez form Figuring OID on Long-Term Debt Instruments How you figure the OID on a long-term debt instrument depends on the date it was issued. How to fill out a 1040ez form It also may depend on the type of the debt instrument. How to fill out a 1040ez form There are different rules for each of the following debt instruments. How to fill out a 1040ez form Corporate debt instruments issued after 1954 and before May 28, 1969, and government debt instruments issued after 1954 and before July 2, 1982. How to fill out a 1040ez form Corporate debt instruments issued after May 27, 1969, and before July 2, 1982. How to fill out a 1040ez form Debt instruments issued after July 1, 1982, and before 1985. How to fill out a 1040ez form Debt instruments issued after 1984 (other than debt instruments described in (5) and (6)). How to fill out a 1040ez form Contingent payment debt instruments issued after August 12, 1996. How to fill out a 1040ez form Inflation-indexed debt instruments (including Treasury inflation-protected securities) issued after January 5, 1997. How to fill out a 1040ez form Zero coupon bonds. How to fill out a 1040ez form   The rules for figuring OID on zero coupon bonds backed by U. How to fill out a 1040ez form S. How to fill out a 1040ez form Treasury securities are discussed under Figuring OID on Stripped Bonds and Coupons, later. How to fill out a 1040ez form Corporate Debt Instruments Issued After 1954 and Before May 28, 1969, and Government Debt Instruments Issued After 1954 and Before July 2, 1982 If you hold these debt instruments as capital assets, you include OID in income only in the year the debt instrument is sold, exchanged, or redeemed, and only if you have a gain. How to fill out a 1040ez form The OID, which is taxed as ordinary income, generally equals the following amount. How to fill out a 1040ez form   number of full months you held the debt instrument  number of full months from date of original issue to date of maturity X original issue discount The balance of the gain is capital gain. How to fill out a 1040ez form If there is a loss on the sale of the debt instrument, the entire loss is a capital loss and no OID is reported. How to fill out a 1040ez form Corporate Debt Instruments Issued After May 27, 1969, and Before July 2, 1982 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments. How to fill out a 1040ez form For information about showing the correct OID on your tax return, see the discussion under How To Report OID, earlier. How to fill out a 1040ez form Your basis in the debt instrument is increased by the OID you include in income. How to fill out a 1040ez form Form 1099-OID. How to fill out a 1040ez form   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. How to fill out a 1040ez form However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. How to fill out a 1040ez form See Reduction for acquisition premium, later. How to fill out a 1040ez form If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. How to fill out a 1040ez form irs. How to fill out a 1040ez form gov/pub1212 by clicking the link under Recent Developments. How to fill out a 1040ez form Form 1099-OID not received. How to fill out a 1040ez form    The OID listed is for each $1,000 of redemption price. How to fill out a 1040ez form You must adjust the listed amount if your debt instrument has a different principal amount. How to fill out a 1040ez form For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. How to fill out a 1040ez form   If you held the debt instrument the entire year, use the OID shown in Section I-A for a calendar year. How to fill out a 1040ez form (If your debt instrument is not listed in Section I-A, consult the issuer for information about the issue price and the OID that accrued for that year. How to fill out a 1040ez form ) If you did not hold the debt instrument the entire year, figure your OID using the following method. How to fill out a 1040ez form Divide the OID shown by 12. How to fill out a 1040ez form Multiply the result in (1) by the number of complete and partial months (for example, 6½ months) you held the debt instrument during a calendar year. How to fill out a 1040ez form This is the OID to include in income unless you paid an acquisition premium. How to fill out a 1040ez form The reduction for acquisition premium is discussed next. How to fill out a 1040ez form Reduction for acquisition premium. How to fill out a 1040ez form   If you bought the debt instrument at an acquisition premium, figure the OID to include in income as follows. How to fill out a 1040ez form Divide the total OID on the debt instrument by the number of complete months, and any part of a month, from the date of original issue to the maturity date. How to fill out a 1040ez form This is the monthly OID. How to fill out a 1040ez form Subtract from your cost the issue price and the accumulated OID from the date of issue to the date of purchase. How to fill out a 1040ez form (If the result is zero or less, stop here. How to fill out a 1040ez form You did not pay an acquisition premium. How to fill out a 1040ez form ) Divide the amount figured in (2) by the number of complete months, and any part of a month, from the date of your purchase to the maturity date. How to fill out a 1040ez form Subtract the amount figured in (3) from the amount figured in (1). How to fill out a 1040ez form This is the OID to include in income for each month you hold the debt instrument during the year. How to fill out a 1040ez form Transfers during the month. How to fill out a 1040ez form   If you buy or sell a debt instrument on any day other than the same day of the month as the date of original issue, the ratable monthly portion of OID for the month of sale is divided between the seller and the buyer according to the number of days each held the debt instrument. How to fill out a 1040ez form Your holding period for this purpose begins the day you acquire the debt instrument and ends the day before you dispose of it. How to fill out a 1040ez form Debt Instruments Issued After July 1, 1982, and Before 1985 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments and increase your basis by the amount included. How to fill out a 1040ez form For information about showing the correct OID on your tax return, see How To Report OID, earlier. How to fill out a 1040ez form Form 1099-OID. How to fill out a 1040ez form   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. How to fill out a 1040ez form However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. How to fill out a 1040ez form See Constant yield method and the discussions on acquisition premium that follow, later. How to fill out a 1040ez form If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. How to fill out a 1040ez form irs. How to fill out a 1040ez form gov/pub1212 by clicking the link under Recent Developments. How to fill out a 1040ez form Form 1099-OID not received. How to fill out a 1040ez form    The OID listed is for each $1,000 of redemption price. How to fill out a 1040ez form You must adjust the listed amount if your debt instrument has a different principal amount. How to fill out a 1040ez form For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. How to fill out a 1040ez form   If you held the debt instrument the entire year, use the OID shown in Section I-A. How to fill out a 1040ez form (If your instrument is not listed in Section I-A, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. How to fill out a 1040ez form ) If you did not hold the debt instrument the entire year, figure your OID using either of the following methods. How to fill out a 1040ez form Method 1. How to fill out a 1040ez form    Divide the total OID for a calendar year by 365 (366 for leap years). How to fill out a 1040ez form Multiply the result in (1) by the number of days you held the debt instrument during that particular year. How to fill out a 1040ez form  This computation is an approximation and may result in a slightly higher OID than Method 2. How to fill out a 1040ez form Method 2. How to fill out a 1040ez form    Look up the daily OID for the first accrual period you held the debt instrument during a calendar year. How to fill out a 1040ez form (See Accrual period under Constant yield method, next. How to fill out a 1040ez form ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. How to fill out a 1040ez form If you held the debt instrument for part of both accrual periods, repeat (1) and (2) for the second accrual period. How to fill out a 1040ez form Add the results of (2) and (3). How to fill out a 1040ez form This is the OID to include in income, unless you paid an acquisition premium. How to fill out a 1040ez form (The reduction for acquisition premium is discussed later. How to fill out a 1040ez form ) Constant yield method. How to fill out a 1040ez form   This discussion shows how to figure OID on debt instruments issued after July 1, 1982, and before 1985, using a constant yield method. How to fill out a 1040ez form OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. How to fill out a 1040ez form   Figure the OID allocable to any accrual period as follows. How to fill out a 1040ez form Multiply the adjusted issue price at the beginning of the accrual period by the debt instrument's yield to maturity. How to fill out a 1040ez form Subtract from the result in (1) any qualified stated interest allocable to the accrual period. How to fill out a 1040ez form Accrual period. How to fill out a 1040ez form   An accrual period for any OID debt instrument issued after July 1, 1982, and before 1985 is each 1-year period beginning on the date of the issue of the obligation and each anniversary thereafter, or the shorter period to maturity for the last accrual period. How to fill out a 1040ez form Your tax year will usually include parts of two accrual periods. How to fill out a 1040ez form Daily OID. How to fill out a 1040ez form   The OID for any accrual period is allocated equally to each day in the accrual period. How to fill out a 1040ez form You must include in income the sum of the OID amounts for each day you hold the debt instrument during the year. How to fill out a 1040ez form If your tax year includes parts of two or more accrual periods, you must include the proper daily OID amounts for each accrual period. How to fill out a 1040ez form Figuring daily OID. How to fill out a 1040ez form   The daily OID for the initial accrual period is figured using the following formula. How to fill out a 1040ez form   (ip × ytm) − qsi     p   ip = issue price ytm = yield to maturity qsi = qualified stated interest p = number of days in accrual period         The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. How to fill out a 1040ez form Reduction for acquisition premium on debt instruments purchased before July 19, 1984. How to fill out a 1040ez form   If you bought the debt instrument at an acquisition premium before July 19, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. How to fill out a 1040ez form Figure the daily acquisition premium by dividing the total acquisition premium by the number of days in the period beginning on your purchase date and ending on the day before the date of maturity. How to fill out a 1040ez form Reduction for acquisition premium on debt instruments purchased after July 18, 1984. How to fill out a 1040ez form   If you bought the debt instrument at an acquisition premium after July 18, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. How to fill out a 1040ez form However, the method of figuring the daily acquisition premium is different from the method described in the preceding discussion. How to fill out a 1040ez form To figure the daily acquisition premium under this method, multiply the daily OID by the following fraction. How to fill out a 1040ez form The numerator is the acquisition premium. How to fill out a 1040ez form The denominator is the total OID remaining for the debt instrument after your purchase date. How to fill out a 1040ez form Section I-A is available at www. How to fill out a 1040ez form irs. How to fill out a 1040ez form gov/pub1212 and clicking the link under Recent Developments. How to fill out a 1040ez form Using Section I-A to figure accumulated OID. How to fill out a 1040ez form   If you bought your corporate debt instrument in a calendar year or the subsequent year, you can figure the accumulated OID to the date of purchase by adding the following amounts. How to fill out a 1040ez form The amount from the “Total OID to January 1, YYYY” column for your debt instrument. How to fill out a 1040ez form The OID from January 1 of a calendar year to the date of purchase, figured as follows. How to fill out a 1040ez form Multiply the daily OID for the first accrual period in the calendar year by the number of days from January 1 to the date of purchase, or the end of the accrual period if the debt instrument was purchased in the second or third accrual period. How to fill out a 1040ez form Multiply the daily OID for each subsequent accrual period by the number of days in the period to the date of purchase or the end of the accrual period, whichever applies. How to fill out a 1040ez form Add the amounts figured in (2a) and (2b). How to fill out a 1040ez form Debt Instruments Issued After 1984 If you hold debt instruments issued after 1984, you must report part of the OID in gross income each year that you own the debt instruments. How to fill out a 1040ez form You must include the OID in gross income whether or not you hold the debt instrument as a capital asset. How to fill out a 1040ez form Your basis in the debt instrument is increased by the OID you include in income. How to fill out a 1040ez form For information about showing the correct OID on your tax return, see How To Report OID, earlier. How to fill out a 1040ez form Form 1099-OID. How to fill out a 1040ez form   You should receive a Form 1099-OID showing OID for the part of a calendar year you held the debt instrument. How to fill out a 1040ez form However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. How to fill out a 1040ez form See Constant yield method and Reduction for acquisition premium, later. How to fill out a 1040ez form   You may also need to refigure the OID for a contingent payment or inflation-indexed debt instrument on which the amount reported on Form 1099-OID is inaccurate. How to fill out a 1040ez form See Contingent Payment Debt Instruments or Inflation-Indexed Debt Instruments, later. How to fill out a 1040ez form If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-B available at www. How to fill out a 1040ez form irs. How to fill out a 1040ez form gov/pub1212 by clicking the link under Recent Developments. How to fill out a 1040ez form Form 1099-OID not received. How to fill out a 1040ez form   The OID listed is for each $1,000 of redemption price. How to fill out a 1040ez form You must adjust the listed amount if your debt instrument has a different principal amount. How to fill out a 1040ez form For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. How to fill out a 1040ez form   Use the OID shown in Section I-B for a calendar year if you held the debt instrument the entire year. How to fill out a 1040ez form (If your debt instrument is not listed in Section I-B, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. How to fill out a 1040ez form ) If you did not hold the debt instrument the entire year, figure your OID as follows. How to fill out a 1040ez form Look up the daily OID for the first accrual period in which you held the debt instrument during a calendar year. How to fill out a 1040ez form (See Accrual period under Constant yield method, later. How to fill out a 1040ez form ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. How to fill out a 1040ez form Repeat (1) and (2) for any remaining accrual periods in which you held the debt instrument. How to fill out a 1040ez form Add the results of (2) and (3). How to fill out a 1040ez form This is the OID to include in income for that year, unless you paid an acquisition premium. How to fill out a 1040ez form (The reduction for acquisition premium is discussed later. How to fill out a 1040ez form ) Tax-exempt bond. How to fill out a 1040ez form   If you own a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. How to fill out a 1040ez form You need to make this adjustment to determine if you have a gain or loss on a later disposition of the bond. How to fill out a 1040ez form In general, use the rules that follow to determine your OID. How to fill out a 1040ez form Constant yield method. How to fill out a 1040ez form   This discussion shows how to figure OID on debt instruments issued after 1984 using a constant yield method. How to fill out a 1040ez form (The special rules that apply to contingent payment debt instruments and inflation-indexed debt instruments are explained later. How to fill out a 1040ez form ) OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. How to fill out a 1040ez form   Figure the OID allocable to any accrual period as follows. How to fill out a 1040ez form Multiply the adjusted issue price at the beginning of the accrual period by a fraction. How to fill out a 1040ez form The numerator of the fraction is the debt instrument's yield to maturity and the denominator is the number of accrual periods per year. How to fill out a 1040ez form The yield must be stated appropriately taking into account the length of the particular accrual period. How to fill out a 1040ez form Subtract from the result in (1) any qualified stated interest allocable to the accrual period. How to fill out a 1040ez form Accrual period. How to fill out a 1040ez form   For debt instruments issued after 1984 and before April 4, 1994, an accrual period is each 6-month period that ends on the day that corresponds to the stated maturity date of the debt instrument or the date 6 months before that date. How to fill out a 1040ez form For example, a debt instrument maturing on March 31 has accrual periods that end on September 30 and March 31 of each calendar year. How to fill out a 1040ez form Any short period is included as the first accrual period. How to fill out a 1040ez form   For debt instruments issued after April 3, 1994, accrual periods may be of any length and may vary in length over the term of the debt instrument, as long as each accrual period is no longer than 1 year and all payments are made on the first or last day of an accrual period. How to fill out a 1040ez form However, the OID listed for these debt instruments in Section I-B has been figured using 6-month accrual periods. How to fill out a 1040ez form Daily OID. How to fill out a 1040ez form   The OID for any accrual period is allocated equally to each day in the accrual period. How to fill out a 1040ez form Figure the amount to include in income by adding the OID for each day you hold the debt instrument during the year. How to fill out a 1040ez form Since your tax year will usually include parts of two or more accrual periods, you must include the proper daily OID for each accrual period. How to fill out a 1040ez form If your debt instrument has 6-month accrual periods, your tax year will usually include one full 6-month accrual period and parts of two other 6-month periods. How to fill out a 1040ez form Figuring daily OID. How to fill out a 1040ez form   The daily OID for the initial accrual period is figured using the following formula. How to fill out a 1040ez form   (ip × ytm/n) − qsi     p   ip = issue price ytm = yield to maturity n = number of accrual periods in 1 year qsi = qualified stated interest p = number of days in accrual period       The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. How to fill out a 1040ez form Example 5. How to fill out a 1040ez form On January 1 of Year 1, you bought a 15-year, 10% debt instrument of A Corporation at original issue for $86,235. How to fill out a 1040ez form 17. How to fill out a 1040ez form According to the prospectus, the debt instrument matures on December 31 of Year 15 at a stated redemption price of $100,000. How to fill out a 1040ez form The yield to maturity is 12%, compounded semiannually. How to fill out a 1040ez form The debt instrument provides for qualified stated interest payments of $5,000 on June 30 and December 31 of each calendar year. How to fill out a 1040ez form The accrual periods are the 6-month periods ending on each of these dates. How to fill out a 1040ez form The number of days for the first accrual period (January 1 through June 30) is 181 days (182 for leap years). How to fill out a 1040ez form The daily OID for the first accrual period is figured as follows. How to fill out a 1040ez form   ($86,235. How to fill out a 1040ez form 17 x . How to fill out a 1040ez form 12/2) – $5,000     181 days     = $174. How to fill out a 1040ez form 11020 = $. How to fill out a 1040ez form 96193   181           The adjusted issue price at the beginning of the second accrual period is the issue price plus the OID previously includible in income ($86,235. How to fill out a 1040ez form 17 + $174. How to fill out a 1040ez form 11), or $86,409. How to fill out a 1040ez form 28. How to fill out a 1040ez form The number of days for the second accrual period (July 1 through December 31) is 184 days. How to fill out a 1040ez form The daily OID for the second accrual period is figured as follows. How to fill out a 1040ez form   ($86,409. How to fill out a 1040ez form 28 x . How to fill out a 1040ez form 12/2) – $5,000     184 days     = $184. How to fill out a 1040ez form 55681 = $1. How to fill out a 1040ez form 00303   184 Since the first and second accrual periods coincide exactly with your tax year, you include in income for Year 1 the OID allocable to the first two accrual periods, $174. How to fill out a 1040ez form 11 ($. How to fill out a 1040ez form 95665 × 182 days) plus $184. How to fill out a 1040ez form 56 ($1. How to fill out a 1040ez form 00303 × 184 days), or $358. How to fill out a 1040ez form 67. How to fill out a 1040ez form Add the OID to the $10,000 interest you report on your income tax return for Year 1. How to fill out a 1040ez form Example 6. How to fill out a 1040ez form Assume the same facts as in Example 5, except that you bought the debt instrument at original issue on May 1 of Year 1, with a maturity date of April 30, Year 16. How to fill out a 1040ez form Also, the interest payment dates are October 31 and April 30 of each calendar year. How to fill out a 1040ez form The accrual periods are the 6-month periods ending on each of these dates. How to fill out a 1040ez form The number of days for the first accrual period (May 1 through October 31) is 184 days. How to fill out a 1040ez form The daily OID for the first accrual period is figured as follows. How to fill out a 1040ez form   ($86,235. How to fill out a 1040ez form 17 x . How to fill out a 1040ez form 12/2) – $5,000     184 days     = $174. How to fill out a 1040ez form 11020 = $. How to fill out a 1040ez form 94625   184           The number of days for the second accrual period (November 1 through April 30) is 181 days (182 for leap years). How to fill out a 1040ez form The daily OID for the second accrual period is figured as follows. How to fill out a 1040ez form   ($86,409. How to fill out a 1040ez form 28 x . How to fill out a 1040ez form 12/2) – $5,000     181 days     = $184. How to fill out a 1040ez form 55681 = $1. How to fill out a 1040ez form 01965   181 If you hold the debt instrument through the end of Year 1, you must include $236. How to fill out a 1040ez form 31 of OID in income. How to fill out a 1040ez form This is $174. How to fill out a 1040ez form 11 ($. How to fill out a 1040ez form 94625 × 184 days) for the period May 1 through October 31 plus $62. How to fill out a 1040ez form 20 ($1. How to fill out a 1040ez form 01965 × 61 days) for the period November 1 through December 31. How to fill out a 1040ez form The OID is added to the $5,000 interest income paid on October 31 of Year 1. How to fill out a 1040ez form Your basis in the debt instrument is increased by the OID you include in income. How to fill out a 1040ez form On January 1 of Year 2, your basis in the A Corporation debt instrument is $86,471. How to fill out a 1040ez form 48 ($86,235. How to fill out a 1040ez form 17 + $236. How to fill out a 1040ez form 31). How to fill out a 1040ez form Short first accrual period. How to fill out a 1040ez form   You may have to make adjustments if a debt instrument has a short first accrual period. How to fill out a 1040ez form For example, a debt instrument with 6-month accrual periods that is issued on February 15 and matures on October 31 has a short first accrual period that ends April 30. How to fill out a 1040ez form (The remaining accrual periods begin on May 1 and November 1. How to fill out a 1040ez form ) For this short period, figure the daily OID as described earlier, but adjust the yield for the length of the short accrual period. How to fill out a 1040ez form You may use any reasonable compounding method in determining OID for a short period. How to fill out a 1040ez form Examples of reasonable compounding methods include continuous compounding and monthly compounding (that is, simple interest within a month). How to fill out a 1040ez form Consult your tax advisor for more information about making this computation. How to fill out a 1040ez form   The OID for the final accrual period is the difference between the amount payable at maturity (other than a payment of qualified stated interest) and the adjusted issue price at the beginning of the final accrual period. How to fill out a 1040ez form Reduction for acquisition premium. How to fill out a 1040ez form   If you bought the debt instrument at an acquisition premium, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. How to fill out a 1040ez form To figure the daily acquisition premium, multiply the daily OID by the following fraction. How to fill out a 1040ez form The numerator is the acquisition premium. How to fill out a 1040ez form The denominator is the total OID remaining for the debt instrument after your purchase date. How to fill out a 1040ez form Example 7. How to fill out a 1040ez form Assume the same facts as in Example 6, except that you bought the debt instrument on November 1 of Year 1 for $87,000, after its original issue on May 1 of Year 1. How to fill out a 1040ez form The adjusted issue price on November 1 of Year 1 is $86,409. How to fill out a 1040ez form 28 ($86,235. How to fill out a 1040ez form 17 + $174. How to fill out a 1040ez form 11). How to fill out a 1040ez form In this case, you paid an acquisition premium of $590. How to fill out a 1040ez form 72 ($87,000 − $86,409. How to fill out a 1040ez form 28). How to fill out a 1040ez form The daily OID for the accrual period November 1 through April 30, reduced for the acquisition premium, is figured as follows. How to fill out a 1040ez form 1) Daily OID on date of purchase (2nd accrual period) $1. How to fill out a 1040ez form 01965*  2)  Acquisition premium $590. How to fill out a 1040ez form 72    3)  Total OID remaining after purchase date ($13,764. How to fill out a 1040ez form 83 − $174. How to fill out a 1040ez form 11) 13,590. How to fill out a 1040ez form 72   4) Line 2 ÷ line 3 . How to fill out a 1040ez form 04346  5)  Line 1 × line 4 . How to fill out a 1040ez form 04432  6)  Daily OID reduced for the acquisition premium. How to fill out a 1040ez form Line 1 − line 5 $0. How to fill out a 1040ez form 97533  * As shown in Example 6. How to fill out a 1040ez form The total OID to include in income for Year 1 is $59. How to fill out a 1040ez form 50 ($. How to fill out a 1040ez form 97533 × 61 days). How to fill out a 1040ez form Contingent Payment Debt Instruments This discussion shows how to figure OID on a contingent payment debt instrument issued after August 12, 1996, that was issued for cash or publicly traded property. How to fill out a 1040ez form In general, a contingent payment debt instrument provides for one or more payments that are contingent as to timing or amount. How to fill out a 1040ez form If you hold a contingent payment bond, you must report OID as it accrues each year. How to fill out a 1040ez form Because the actual payments on a contingent payment debt instrument cannot be known in advance, issuers and holders cannot use the constant yield method (discussed earlier under Debt Instruments Issued After 1984) without making certain assumptions about the payments on the debt instrument. How to fill out a 1040ez form To figure OID accruals on contingent payment debt instruments, holders and issuers must use the noncontingent bond method. How to fill out a 1040ez form Noncontingent bond method. How to fill out a 1040ez form    Under this method, the issuer must compute a comparable yield for the debt instrument and, based on this yield, construct a projected payment schedule for the instrument, which includes a projected fixed amount for each contingent payment. How to fill out a 1040ez form In general, holders and issuers accrue OID on this projected payment schedule using the constant yield method that applies to fixed payment debt instruments. How to fill out a 1040ez form When a contingent payment differs from the projected fixed amount, the holders and issuers make adjustments to their OID accruals. How to fill out a 1040ez form If the actual contingent payment is larger than expected, both the issuer and the holder increase their OID accruals. How to fill out a 1040ez form If the actual contingent payment is smaller than expected, holders and issuers generally decrease their OID accruals. How to fill out a 1040ez form Form 1099-OID. How to fill out a 1040ez form   The amount shown on Form 1099-OID in box 1 you receive for a contingent payment debt instrument may not be the correct amount to include in income. How to fill out a 1040ez form For example, the amount may not be correct if the contingent payment was different from the projected amount. How to fill out a 1040ez form If the amount in box 1 is not correct, you must figure the OID to report on your return under the following rules. How to fill out a 1040ez form For information on showing an OID adjustment on your tax return, see How To Report OID, earlier. How to fill out a 1040ez form Figuring OID. How to fill out a 1040ez form   To figure OID on a contingent payment debt instrument, you need to know the “comparable yield” and “projected payment schedule” of the debt instrument. How to fill out a 1040ez form The issuer must make these available to you. How to fill out a 1040ez form Comparable yield. How to fill out a 1040ez form   The comparable yield generally is the yield at which the issuer would issue a fixed rate debt instrument with terms and conditions similar to those of the contingent payment debt instrument. How to fill out a 1040ez form The comparable yield is determined as of the debt instrument's issue date. How to fill out a 1040ez form Projected payment schedule. How to fill out a 1040ez form   The projected payment schedule for a contingent payment debt instrument includes all fixed payments due under the instrument and a projected fixed amount for each contingent payment. How to fill out a 1040ez form The projected payment schedule is created by the issuer as of the debt instrument's issue date. How to fill out a 1040ez form It is used to determine the issuer's and holder's interest accruals and adjustments. How to fill out a 1040ez form Steps for figuring OID. How to fill out a 1040ez form   Figure the OID on a contingent payment debt instrument in two steps. How to fill out a 1040ez form Figure the OID using the constant yield method (discussed earlier under Debt Instruments Issued After 1984 ) that applies to fixed payment debt instruments. How to fill out a 1040ez form Use the comparable yield as the yield to maturity. How to fill out a 1040ez form In general, use the projected payment schedule to determine the instrument's adjusted issue price at the beginning of each accrual period (other than the initial period). How to fill out a 1040ez form Do not treat any amount payable as qualified stated interest. How to fill out a 1040ez form Adjust the OID in (1) to account for actual contingent payments. How to fill out a 1040ez form If the contingent payment is greater than the projected fixed amount, you have a positive adjustment. How to fill out a 1040ez form If the contingent payment is less than the projected fixed amount, you have a negative adjustment. How to fill out a 1040ez form Net positive adjustment. How to fill out a 1040ez form   A net positive adjustment exists for a tax year when the total of any positive adjustments described in (2) above for the tax year is more than the total of any negative adjustments for the tax year. How to fill out a 1040ez form Treat a net positive adjustment as additional OID for the tax year. How to fill out a 1040ez form Net negative adjustment. How to fill out a 1040ez form   A net negative adjustment exists for a tax year when the total of any negative adjustments described in (2) above for the tax year is more than the total of any positive adjustments for the tax year. How to fill out a 1040ez form Use a net negative adjustment to offset OID on the debt instrument for the tax year. How to fill out a 1040ez form If the net negative adjustment is more than the OID on the debt instrument for the tax year, you can claim the difference as an ordinary loss. How to fill out a 1040ez form However, the amount you can claim as an ordinary loss is limited to the OID on the debt instrument you included in income in prior tax years. How to fill out a 1040ez form You must carry forward any net negative adjustment that is more than the total OID for the tax year and prior tax years and treat it as a negative adjustment in the next tax year. How to fill out a 1040ez form Basis adjustments. How to fill out a 1040ez form   In general, increase your basis in a contingent payment debt instrument by the OID included in income. How to fill out a 1040ez form Your basis, however, is not affected by any negative or positive adjustments. How to fill out a 1040ez form Decrease your basis by any noncontingent payment received and the projected contingent payment scheduled to be received. How to fill out a 1040ez form Treatment of gain or loss on sale or exchange. How to fill out a 1040ez form   If you sell a contingent payment debt instrument at a gain, your gain is ordinary income (interest income), even if you hold the debt instrument as a capital asset. How to fill out a 1040ez form If you sell a contingent payment debt instrument at a loss, your loss is an ordinary loss to the extent of your prior OID accruals on the debt instrument. How to fill out a 1040ez form If the debt instrument is a capital asset, treat any loss that is more than your prior OID accruals as a capital loss. How to fill out a 1040ez form See Regulations section 1. How to fill out a 1040ez form 1275-4 for exceptions to these rules. How to fill out a 1040ez form Premium, acquisition premium, and market discount. How to fill out a 1040ez form   The rules for accruing premium, acquisition premium, and market discount do not apply to a contingent payment debt instrument. How to fill out a 1040ez form See Regulations section 1. How to fill out a 1040ez form 1275-4 to determine how to account for these items. How to fill out a 1040ez form Inflation-Indexed Debt Instruments This discussion shows how you figure OID on certain inflation-indexed debt instruments issued after January 5, 1997. How to fill out a 1040ez form An inflation-indexed debt instrument is generally a debt instrument on which the payments are adjusted for inflation and d