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Irs Forms 1040ez 2012

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Irs Forms 1040ez 2012

Irs forms 1040ez 2012 Publication 901 - Additional Material Table of Contents How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Irs forms 1040ez 2012 How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. Irs forms 1040ez 2012 By selecting the method that is best for you, you will have quick and easy access to tax help. Irs forms 1040ez 2012 Free help with your tax return. Irs forms 1040ez 2012   Free help in preparing your return is available nationwide from IRS-certified volunteers. Irs forms 1040ez 2012 The Volunteer Income Tax Assistance (VITA) program is designed to help low-moderate income, elderly, disabled, and limited English proficient taxpayers. Irs forms 1040ez 2012 The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. Irs forms 1040ez 2012 To find the nearest VITA or TCE site, visit IRS. Irs forms 1040ez 2012 gov or call 1-800-906-9887 or 1-800-829-1040. Irs forms 1040ez 2012   As part of the TCE program, AARP offers the Tax-Aide counseling program. Irs forms 1040ez 2012 To find the nearest AARP Tax-Aide site, visit AARP's website at www. Irs forms 1040ez 2012 aarp. Irs forms 1040ez 2012 org/money/taxaide or call 1-888-227-7669. Irs forms 1040ez 2012   For more information on these programs, go to IRS. Irs forms 1040ez 2012 gov and enter “VITA” in the search box. Irs forms 1040ez 2012 Internet. Irs forms 1040ez 2012 You can access the IRS website at IRS. Irs forms 1040ez 2012 gov 24 hours a day, 7 days a week to: E-file your return. Irs forms 1040ez 2012 Find out about commercial tax preparation and e-file services available free to eligible taxpayers. Irs forms 1040ez 2012 Check the status of your 2012 refund. Irs forms 1040ez 2012 Go to IRS. Irs forms 1040ez 2012 gov and click on Where’s My Refund. Irs forms 1040ez 2012 Information about your return will generally be available within 24 hours after the IRS receives your e-filed return, or 4 weeks after you mail your paper return. Irs forms 1040ez 2012 If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Irs forms 1040ez 2012 Have your 2012 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Irs forms 1040ez 2012 Where's My Refund? has a new look this year! The tool will include a tracker that displays progress through three stages: (1) return received, (2) refund approved, and (3) refund sent. Irs forms 1040ez 2012 Where's My Refund? will provide an actual personalized refund date as soon as the IRS processes your tax return and approves your refund. Irs forms 1040ez 2012 So in a change from previous filing seasons, you won't get an estimated refund date right away. Irs forms 1040ez 2012 Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. Irs forms 1040ez 2012 You can obtain a free transcript online at IRS. Irs forms 1040ez 2012 gov by clicking on Order a Return or Account Transcript under “Tools. Irs forms 1040ez 2012 ” For a transcript by phone, call 1-800-908-9946 and follow the prompts in the recorded message. Irs forms 1040ez 2012 You will be prompted to provide your SSN or Individual Taxpayer Identification Number (ITIN), date of birth, street address and ZIP code. Irs forms 1040ez 2012 Download forms, including talking tax forms, instructions, and publications. Irs forms 1040ez 2012 Order IRS products. Irs forms 1040ez 2012 Research your tax questions. Irs forms 1040ez 2012 Search publications by topic or keyword. Irs forms 1040ez 2012 Use the Internal Revenue Code, regulations, or other official guidance. Irs forms 1040ez 2012 View Internal Revenue Bulletins (IRBs) published in the last few years. Irs forms 1040ez 2012 Figure your withholding allowances using the IRS Withholding Calculator at www. Irs forms 1040ez 2012 irs. Irs forms 1040ez 2012 gov/individuals. Irs forms 1040ez 2012 Determine if Form 6251 (Alternative Minimum Tax— Individuals), must be filed by using our Alternative Minimum Tax (AMT) Assistant available at IRS. Irs forms 1040ez 2012 gov by typing Alternative Minimum Tax Assistant in the search box. Irs forms 1040ez 2012 Sign up to receive local and national tax news by email. Irs forms 1040ez 2012 Get information on starting and operating a small business. Irs forms 1040ez 2012 Phone. Irs forms 1040ez 2012 Many services are available by phone. Irs forms 1040ez 2012   Ordering forms, instructions, and publications. Irs forms 1040ez 2012 Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions (limited to 5 years). Irs forms 1040ez 2012 You should receive your order within 10 days. Irs forms 1040ez 2012 Asking tax questions. Irs forms 1040ez 2012 Call the IRS with your tax questions at 1-800-829-1040. Irs forms 1040ez 2012 Solving problems. Irs forms 1040ez 2012 You can get face-to-face help solving tax problems most business days in IRS Taxpayer Assistance Centers (TAC). Irs forms 1040ez 2012 An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Irs forms 1040ez 2012 Call your local Taxpayer Assistance Center for an appointment. Irs forms 1040ez 2012 To find the number, go to www. Irs forms 1040ez 2012 irs. Irs forms 1040ez 2012 gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Irs forms 1040ez 2012 TTY/TDD equipment. Irs forms 1040ez 2012 If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. Irs forms 1040ez 2012 The TTY/TDD telephone number is for individuals who are deaf, hard of hearing, or have a speech disability. Irs forms 1040ez 2012 These individuals can also access the IRS through relay services such as the Federal Relay Service at www. Irs forms 1040ez 2012 gsa. Irs forms 1040ez 2012 gov/fedrelay. Irs forms 1040ez 2012 TeleTax topics. Irs forms 1040ez 2012 Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. Irs forms 1040ez 2012 Checking the status of your 2012 refund. Irs forms 1040ez 2012 To check the status of your 2012 refund, call 1-800-829-1954 or 1-800-829-4477 (automated Where's My Refund? information 24 hours a day, 7 days a week). Irs forms 1040ez 2012 Information about your return will generally be available within 24 hours after the IRS receives your e-filed return, or 4 weeks after you mail your paper return. Irs forms 1040ez 2012 If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Irs forms 1040ez 2012 Have your 2012 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Irs forms 1040ez 2012 Where's My Refund? will provide an actual personalized refund date as soon as the IRS processes your tax return and approves your refund. Irs forms 1040ez 2012 Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. Irs forms 1040ez 2012 Evaluating the quality of our telephone services. Irs forms 1040ez 2012 To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. Irs forms 1040ez 2012 One method is for a second IRS representative to listen in on or record random telephone calls. Irs forms 1040ez 2012 Another is to ask some callers to complete a short survey at the end of the call. Irs forms 1040ez 2012 Walk-in. Irs forms 1040ez 2012 Some products and services are available on a walk-in basis. Irs forms 1040ez 2012   Products. Irs forms 1040ez 2012 You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Irs forms 1040ez 2012 Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Irs forms 1040ez 2012 Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. Irs forms 1040ez 2012 Services. Irs forms 1040ez 2012 You can walk in to your local TAC most business days for personal, face-to-face tax help. Irs forms 1040ez 2012 An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Irs forms 1040ez 2012 If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. Irs forms 1040ez 2012 No appointment is necessary—just walk in. Irs forms 1040ez 2012 Before visiting, check www. Irs forms 1040ez 2012 irs. Irs forms 1040ez 2012 gov/localcontacts for hours of operation and services provided. Irs forms 1040ez 2012 If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested by calling your local TAC. Irs forms 1040ez 2012 You can leave a message and a representative will call you back within 2 business days. Irs forms 1040ez 2012 All other issues will be handled without an appointment. Irs forms 1040ez 2012 To call your local TAC, go to  www. Irs forms 1040ez 2012 irs. Irs forms 1040ez 2012 gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Irs forms 1040ez 2012 Mail. Irs forms 1040ez 2012 You can send your order for forms, instructions, and publications to the address below. Irs forms 1040ez 2012 You should receive a response within 10 days after your request is received. Irs forms 1040ez 2012  Internal Revenue Service 1201 N. Irs forms 1040ez 2012 Mitsubishi Motorway Bloomington, IL 61705-6613 Taxpayer Advocate Service. Irs forms 1040ez 2012   The Taxpayer Advocate Service (TAS) is your voice at the IRS. Irs forms 1040ez 2012 Its job is to ensure that every taxpayer is treated fairly, and that you know and understand your rights. Irs forms 1040ez 2012 TAS offers free help to guide you through the often-confusing process of resolving tax problems that you haven’t been able to solve on your own. Irs forms 1040ez 2012 Remember, the worst thing you can do is nothing at all. Irs forms 1040ez 2012   TAS can help if you can’t resolve your problem with the IRS and: Your problem is causing financial difficulties for you, your family, or your business. Irs forms 1040ez 2012 You face (or your business is facing) an immediate threat of adverse action. Irs forms 1040ez 2012 You have tried repeatedly to contact the IRS but no one has responded, or the IRS has not responded to you by the date promised. Irs forms 1040ez 2012   If you qualify for help, they will do everything they can to get your problem resolved. Irs forms 1040ez 2012 You will be assigned to one advocate who will be with you at every turn. Irs forms 1040ez 2012 TAS has offices in every state, the District of Columbia, and Puerto Rico. Irs forms 1040ez 2012 Although TAS is independent within the IRS, their advocates know how to work with the IRS to get your problems resolved. Irs forms 1040ez 2012 And its services are always free. Irs forms 1040ez 2012   As a taxpayer, you have rights that the IRS must abide by in its dealings with you. Irs forms 1040ez 2012 The TAS tax toolkit at www. Irs forms 1040ez 2012 TaxpayerAdvocate. Irs forms 1040ez 2012 irs. Irs forms 1040ez 2012 gov can help you understand these rights. Irs forms 1040ez 2012   If you think TAS might be able to help you, call your local advocate, whose number is in your phone book and on our website at www. Irs forms 1040ez 2012 irs. Irs forms 1040ez 2012 gov/advocate. Irs forms 1040ez 2012 You can also call the toll-free number at 1-877-777-4778. Irs forms 1040ez 2012 Deaf and hard of hearing individuals who have access to TTY/TDD equipment can call 1-800-829-4059. Irs forms 1040ez 2012 These individuals can also access the IRS through relay services such as the Federal Relay Service at www. Irs forms 1040ez 2012 gsa. Irs forms 1040ez 2012 gov/fedrelay. Irs forms 1040ez 2012   TAS also handles large-scale or systemic problems that affect many taxpayers. Irs forms 1040ez 2012 If you know of one of these broad issues, please report it through the Systemic Advocacy Management System at www. Irs forms 1040ez 2012 irs. Irs forms 1040ez 2012 gov/advocate. Irs forms 1040ez 2012 Low Income Taxpayer Clinics (LITCs). Irs forms 1040ez 2012   Low Income Taxpayer Clinics (LITCs) are independent from the IRS. Irs forms 1040ez 2012 Some clinics serve individuals whose income is below a certain level and who need to resolve a tax problem. Irs forms 1040ez 2012 These clinics provide professional representation before the IRS or in court on audits, appeals, tax collection disputes, and other issues for free or for a small fee. Irs forms 1040ez 2012 Some clinics can provide information about taxpayer rights and responsibilities in many different languages for individuals who speak English as a second language. Irs forms 1040ez 2012 For more information and to find a clinic near you, see the LITC page on www. Irs forms 1040ez 2012 irs. Irs forms 1040ez 2012 gov/advocate or IRS Publication 4134, Low Income Taxpayer Clinic List. Irs forms 1040ez 2012 This publication is also available by calling 1-800-TAX-FORM (1-800-829-3676) or at your local IRS office. Irs forms 1040ez 2012 Free tax services. Irs forms 1040ez 2012   Publication 910, IRS Guide to Free Tax Services, is your guide to IRS services and resources. Irs forms 1040ez 2012 Learn about free tax information from the IRS, including publications, services, and education and assistance programs. Irs forms 1040ez 2012 The publication also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on the telephone. Irs forms 1040ez 2012 The majority of the information and services listed in this publication are available to you free of charge. Irs forms 1040ez 2012 If there is a fee associated with a resource or service, it is listed in the publication. Irs forms 1040ez 2012   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. Irs forms 1040ez 2012 DVD for tax products. Irs forms 1040ez 2012 You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. Irs forms 1040ez 2012 Prior-year forms, instructions, and publications. Irs forms 1040ez 2012 Tax Map: an electronic research tool and finding aid. Irs forms 1040ez 2012 Tax law frequently asked questions. Irs forms 1040ez 2012 Tax Topics from the IRS telephone response system. Irs forms 1040ez 2012 Internal Revenue Code—Title 26 of the U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 Code. Irs forms 1040ez 2012 Links to other Internet-based tax research materials. Irs forms 1040ez 2012 Fill-in, print, and save features for most tax forms. Irs forms 1040ez 2012 Internal Revenue Bulletins. Irs forms 1040ez 2012 Toll-free and email technical support. Irs forms 1040ez 2012 Two releases during the year. Irs forms 1040ez 2012  – The first release will ship the beginning of January 2013. Irs forms 1040ez 2012  – The final release will ship the beginning of March 2013. Irs forms 1040ez 2012 Purchase the DVD from National Technical Information Service (NTIS) at www. Irs forms 1040ez 2012 irs. Irs forms 1040ez 2012 gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). Irs forms 1040ez 2012 Prev  Up  Next   Home   More Online Publications
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The Bureau of Indian Affairs’ mission is to enhance the quality of life, to promote economic opportunity, and to carry out the responsibility to protect and improve the trust assets of American Indians, Indian tribes and Alaska Natives.

Contact the Agency or Department

Website: Bureau of Indian Affairs (BIA)

Contact In-Person: Regional Offices

Address: MS-4606-MIB
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Phone Number: (202) 208-5116

Parent Agency

The Irs Forms 1040ez 2012

Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Adjustment for premium. Irs forms 1040ez 2012 Adjustment for acquisition premium. Irs forms 1040ez 2012 Adjustment for market discount. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 “Original issue discount” is defined first. Irs forms 1040ez 2012 The other terms are listed alphabetically. Irs forms 1040ez 2012 Original issue discount (OID). Irs forms 1040ez 2012   OID is a form of interest. Irs forms 1040ez 2012 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). Irs forms 1040ez 2012 Zero coupon bonds and debt instruments that pay no stated interest until maturity are examples of debt instruments that have OID. Irs forms 1040ez 2012 Accrual period. Irs forms 1040ez 2012   An accrual period is an interval of time used to measure OID. Irs forms 1040ez 2012 The length of an accrual period can be 6 months, a year, or some other period, depending on when the debt instrument was issued. Irs forms 1040ez 2012 Acquisition premium. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 A debt instrument does not have acquisition premium, however, if the debt instrument was purchased at a premium. Irs forms 1040ez 2012 See Premium, later. Irs forms 1040ez 2012 Adjusted issue price. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 In general, the adjusted issue price at the beginning of the debt instrument's first accrual period is its issue price. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Debt instrument. Irs forms 1040ez 2012   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). Irs forms 1040ez 2012 It generally does not include an annuity contract. Irs forms 1040ez 2012 Issue price. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 Market discount. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 The market discount is the difference between the issue price plus accrued OID and your adjusted basis. Irs forms 1040ez 2012 Premium. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 The premium is the excess of the adjusted basis over the payable amounts. Irs forms 1040ez 2012 See Publication 550 for information on the tax treatment of bond premium. Irs forms 1040ez 2012 Qualified stated interest. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 Stated redemption price at maturity. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 Yield to maturity (YTM). Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 The YTM is generally shown on the face of the debt instrument or in the literature you receive from your broker. Irs forms 1040ez 2012 If you do not have this information, consult your broker, tax advisor, or the issuer. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 The OID amounts listed are figured without reference to the price or date at which you acquired the debt instrument. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 The following discussions explain what information is contained in each section of the list. Irs forms 1040ez 2012 Section I. Irs forms 1040ez 2012   This section contains publicly offered, long-term debt instruments. Irs forms 1040ez 2012 Section I-A: Corporate Debt Instruments Issued Before 1985. Irs forms 1040ez 2012 Section I-B: Corporate Debt Instruments Issued After 1984. Irs forms 1040ez 2012 Section I-C: Inflation-Indexed Debt Instruments. Irs forms 1040ez 2012 For each publicly offered debt instrument in Section I, the list contains the following information. Irs forms 1040ez 2012 The name of the issuer. Irs forms 1040ez 2012 The Committee on Uniform Security Identification Procedures (CUSIP) number. Irs forms 1040ez 2012 The issue date. Irs forms 1040ez 2012 The maturity date. Irs forms 1040ez 2012 The issue price expressed as a percent of principal or of stated redemption price at maturity. Irs forms 1040ez 2012 The annual stated or coupon interest rate. Irs forms 1040ez 2012 (This rate is shown as 0. Irs forms 1040ez 2012 00 if no annual interest payments are provided. Irs forms 1040ez 2012 ) The yield to maturity will be added to Section I-B for bonds issued after December 31, 2006. Irs forms 1040ez 2012 The total OID accrued up to January 1 of a calendar year. Irs forms 1040ez 2012 (This information is not available for every instrument. Irs forms 1040ez 2012 ) 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. Irs forms 1040ez 2012 The total OID per $1,000 of principal or maturity value for a calendar year and a subsequent year. Irs forms 1040ez 2012 Section II. Irs forms 1040ez 2012   This section contains stripped coupons and principal components of U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 Treasury and Government-Sponsored Enterprise debt instruments. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 This section also includes debt instruments backed by U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 Treasury securities that represent ownership interests in those securities. Irs forms 1040ez 2012   The obligations listed in Section II are arranged by maturity date. Irs forms 1040ez 2012 The amounts listed are the total OID for a calendar year per $1,000 of redemption price. Irs forms 1040ez 2012 Section III. Irs forms 1040ez 2012   This section contains short-term discount obligations. Irs forms 1040ez 2012 Section III-A: Short-Term U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 Treasury Bills. Irs forms 1040ez 2012 Section III-B: Federal Home Loan Banks. Irs forms 1040ez 2012 Section III-C: Federal National Mortgage Association. Irs forms 1040ez 2012 Section III-D: Federal Farm Credit Banks. Irs forms 1040ez 2012 Section III-E: Federal Home Loan Mortgage Corporation. Irs forms 1040ez 2012 Section III-F: Federal Agricultural Mortgage Corporation. Irs forms 1040ez 2012    Information that supplements Section III-A is available on the Internet at http://www. Irs forms 1040ez 2012 treasurydirect. Irs forms 1040ez 2012 gov/tdhome. Irs forms 1040ez 2012 htm. Irs forms 1040ez 2012   The short-term obligations listed in this section are arranged by maturity date. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Debt Instruments Not on the OID List The list of debt instruments discussed earlier does not contain the following items. Irs forms 1040ez 2012 U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 savings bonds. Irs forms 1040ez 2012 Certificates of deposit and other face-amount certificates issued at a discount, including syndicated certificates of deposit. Irs forms 1040ez 2012 Obligations issued by tax-exempt organizations. Irs forms 1040ez 2012 OID debt instruments that matured or were entirely called by the issuer before the tables were posted on the IRS website. Irs forms 1040ez 2012 Mortgage-backed securities and mortgage participation certificates. Irs forms 1040ez 2012 Long-term OID debt instruments issued before May 28, 1969. Irs forms 1040ez 2012 Short-term obligations, other than the obligations listed in Section III. Irs forms 1040ez 2012 Debt instruments issued at a discount by states or their political subdivisions. Irs forms 1040ez 2012 REMIC regular interests and CDOs. Irs forms 1040ez 2012 Commercial paper and banker's acceptances issued at a discount. Irs forms 1040ez 2012 Obligations issued at a discount by individuals. Irs forms 1040ez 2012 Foreign obligations not traded in the United States and obligations not issued in the United States. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 See Backup Withholding, later. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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). Irs forms 1040ez 2012 Electronic payee statements. Irs forms 1040ez 2012   You can issue Form 1099-OID electronically with the consent of the recipient. Irs forms 1040ez 2012 More information. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 If you sell the obligation for the owner before maturity, you must file Form 1099-B to reflect the gross proceeds to the seller. Irs forms 1040ez 2012 Do not report the accrued discount to the date of sale on either Form 1099-INT or Form 1099-OID. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 A special rule is used to determine the original issue price for information reporting on U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 Treasury bills (T-bills) listed in Section III-A. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 This noncompetitive discount price is the issue price (expressed as a percent of principal) shown in Section III-A. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Example 1. Irs forms 1040ez 2012 There are 13-week and 26-week T-bills maturing on the same date as the T-bill being redeemed. Irs forms 1040ez 2012 The price actually paid by the owner cannot be established by owner or middleman records. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 The interest you report on Form 1099-INT is the OID (per $1,000 of principal) shown in Section III-A for that obligation. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 For this purpose, you can rely on Section I of the OID list to determine the following information. Irs forms 1040ez 2012 Whether a debt instrument has OID. Irs forms 1040ez 2012 The OID to be reported on the Form 1099-OID. Irs forms 1040ez 2012 In general, you must report OID on publicly offered, long-term debt instruments listed in Section I. Irs forms 1040ez 2012 You also can report OID on other long-term debt instruments. Irs forms 1040ez 2012 Form 1099-OID. Irs forms 1040ez 2012   On Form 1099-OID for a calendar year show the following information. Irs forms 1040ez 2012 Box 1. Irs forms 1040ez 2012 The OID for the actual dates the owner held the debt instruments during a calendar year. Irs forms 1040ez 2012 To determine this amount, see Figuring OID, next. Irs forms 1040ez 2012 Box 2. Irs forms 1040ez 2012 The qualified stated interest paid or credited during the calendar year. Irs forms 1040ez 2012 Interest reported here is not reported on Form 1099-INT. Irs forms 1040ez 2012 The qualified stated interest on Treasury inflation-protected securities may be reported on Form 1099-INT in box 3 instead. Irs forms 1040ez 2012 Box 3. Irs forms 1040ez 2012 Any interest or principal forfeited because of an early withdrawal that the owner can deduct from gross income. Irs forms 1040ez 2012 Do not reduce the amounts in boxes 1 and 2 by the forfeiture. Irs forms 1040ez 2012 Box 4. Irs forms 1040ez 2012 Any backup withholding for this debt instrument. Irs forms 1040ez 2012 Box 7. Irs forms 1040ez 2012 The CUSIP number, if any. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 50 2006). Irs forms 1040ez 2012 If the issuer of the debt instrument is other than the payer, show the name of the issuer in this box. Irs forms 1040ez 2012 Box 8. Irs forms 1040ez 2012 The OID on a U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 Treasury obligation for the part of the year the owner held the debt instrument. Irs forms 1040ez 2012 Box 9. Irs forms 1040ez 2012 Investment expenses passed on to holders of a single-class REMIC. Irs forms 1040ez 2012 Boxes 10-12. Irs forms 1040ez 2012 Use to report any state income tax withheld for this debt instrument. Irs forms 1040ez 2012 Figuring OID. Irs forms 1040ez 2012   You can determine the OID on a long-term debt instrument by using either of the following. Irs forms 1040ez 2012 Section I of the OID list. Irs forms 1040ez 2012 The income tax regulations. Irs forms 1040ez 2012 Using Section I. Irs forms 1040ez 2012   If the owner held the debt instrument for the entire calendar year, report the OID shown in Section I for the calendar year. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 For example, if the debt instrument's stated redemption price at maturity is $500, report one-half the listed OID. Irs forms 1040ez 2012   If the owner held the debt instrument for less than the entire calendar year, figure the OID to report as follows. Irs forms 1040ez 2012 Look up the daily OID for the first accrual period in the calendar year during which the owner held the debt instrument. Irs forms 1040ez 2012 Multiply the daily OID by the number of days the owner held the debt instrument during that accrual period. Irs forms 1040ez 2012 Repeat steps (1) and (2) for any remaining accrual periods for the year during which the owner held the debt instrument. Irs forms 1040ez 2012 Add the results in steps (2) and (3) to determine the owner's OID per $1,000 of stated redemption price at maturity. Irs forms 1040ez 2012 If necessary, adjust the OID in (4) to reflect the debt instrument's stated redemption price at maturity. Irs forms 1040ez 2012 Report the result on Form 1099-OID in box 1. Irs forms 1040ez 2012 Using the income tax regulations. Irs forms 1040ez 2012   Instead of using Section I to figure OID, you can use the regulations under sections 1272 through 1275 of the Internal Revenue Code. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 (If you use Section I-B, the OID is figured using 6-month accrual periods. Irs forms 1040ez 2012 )   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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 You must file an information return showing the reportable interest and OID, if any, on the CD. Irs forms 1040ez 2012 These rules apply whether or not you sold the CD to the owner. Irs forms 1040ez 2012 Report OID on a CD in the same way as OID on other debt instruments. Irs forms 1040ez 2012 See Short-Term Obligations Redeemed at Maturity and Long-Term Debt Instruments, earlier. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 However, do not report the interest if either of the following apply. Irs forms 1040ez 2012 You hold the bond as a nominee for the true owner. Irs forms 1040ez 2012 The payee is a foreign person. Irs forms 1040ez 2012 See Payments to foreign person under Backup Withholding, later. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 The coupon may have been “stripped” (separated) from the bond and separately purchased. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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%. Irs forms 1040ez 2012 The backup withholding is deducted at the time a cash payment is made. Irs forms 1040ez 2012 See Pub. Irs forms 1040ez 2012 1281, Backup Withholding for Missing and Incorrect Name/TIN(s), for more information. Irs forms 1040ez 2012 Backup withholding generally applies in the following situations. Irs forms 1040ez 2012 The payee does not give you a taxpayer identification number (TIN). Irs forms 1040ez 2012 The IRS notifies you that the payee gave an incorrect TIN. Irs forms 1040ez 2012 The IRS notifies you that the payee is subject to backup withholding due to payee underreporting. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 However, for short-term discount obligations (other than government obligations), bearer bonds and coupons, and U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Short-term obligations. Irs forms 1040ez 2012   Backup withholding applies to OID on a short-term obligation only when the OID is paid at maturity. Irs forms 1040ez 2012 However, backup withholding applies to any interest payable before maturity when the interest is paid or credited. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 If the purchase price of a listed obligation is not established or is disregarded, you must use the issue price shown in Section III. Irs forms 1040ez 2012 Long-term obligations. Irs forms 1040ez 2012   If no cash payments are made on a long-term obligation before maturity, backup withholding applies only at maturity. Irs forms 1040ez 2012 The amount subject to backup withholding is the OID includible in the owner's gross income for the calendar year when the obligation matures. Irs forms 1040ez 2012 The amount to be withheld is limited to the cash paid. Irs forms 1040ez 2012 Registered long-term obligations with cash payments. Irs forms 1040ez 2012   If a registered long-term obligation has cash payments before maturity, backup withholding applies when a cash payment is made. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 For any payment, the required withholding is limited to the cash paid. Irs forms 1040ez 2012 Payee not the original owner. Irs forms 1040ez 2012   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). Irs forms 1040ez 2012 The amount subject to backup withholding at maturity of a listed obligation must be determined using the issue price shown in Section I. Irs forms 1040ez 2012 Bearer long-term obligations with cash payments. Irs forms 1040ez 2012   If a bearer long-term obligation has cash payments before maturity, backup withholding applies when the cash payments are made. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 The required withholding at maturity is limited to the cash paid. Irs forms 1040ez 2012 Sales and redemptions. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 Backup withholding applies in the following situations. Irs forms 1040ez 2012 The payee does not give you a TIN. Irs forms 1040ez 2012 The IRS notifies you that the payee gave an incorrect TIN. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Payments outside the United States to U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 person. Irs forms 1040ez 2012   The requirements for backup withholding and information reporting apply to payments of OID and interest made outside the United States to a U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 trade or business. Irs forms 1040ez 2012 Payments to foreign person. Irs forms 1040ez 2012   The following discussions explain the rules for backup withholding and information reporting on payments to foreign persons. Irs forms 1040ez 2012 U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 -source amount. Irs forms 1040ez 2012   Backup withholding and information reporting are not required for payments of U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 -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. Irs forms 1040ez 2012 A U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 resident is not a foreign person. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 person. Irs forms 1040ez 2012   For information about the 28% withholding tax that may apply to payments of U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 -source OID or interest to foreign persons, see Publication 515. Irs forms 1040ez 2012 Foreign-source amount. Irs forms 1040ez 2012   Backup withholding and information reporting are not required for payments of foreign-source OID and interest made outside the United States. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 More information. Irs forms 1040ez 2012   For more information about backup withholding and information reporting on foreign-source amounts or payments to foreign persons, see Regulations section 1. Irs forms 1040ez 2012 6049-5. Irs forms 1040ez 2012 Information for Owners of OID Debt Instruments This section is for persons who prepare their own tax returns. Irs forms 1040ez 2012 It discusses the income tax rules for figuring and reporting OID on long-term debt instruments. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 However, the information provided does not cover every situation. Irs forms 1040ez 2012 More information can be found in the regulations under sections 1271 through 1275 of the Internal Revenue Code. Irs forms 1040ez 2012 Including OID in income. Irs forms 1040ez 2012   Generally, you include OID in income as it accrues each year, whether or not you receive any payments from the debt instrument issuer. Irs forms 1040ez 2012 Exceptions. Irs forms 1040ez 2012   The rules for including OID in income as it accrues generally do not apply to the following debt instruments. Irs forms 1040ez 2012 U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 savings bonds. Irs forms 1040ez 2012 Tax-exempt obligations. Irs forms 1040ez 2012 (However, see Tax-Exempt Bonds and Coupons, later. Irs forms 1040ez 2012 ) Obligations issued by individuals before March 2, 1984. Irs forms 1040ez 2012 Loans of $10,000 or less between individuals who are not in the business of lending money. Irs forms 1040ez 2012 (The dollar limit includes outstanding prior loans by the lender to the borrower. Irs forms 1040ez 2012 ) This exception does not apply if a principal purpose of the loan is to avoid any federal tax. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 Publication 550 also discusses rules for holders of REMIC interests and CDOs. Irs forms 1040ez 2012 De minimis rule. Irs forms 1040ez 2012   You can treat OID as zero if the total OID on a debt instrument is less than one-fourth of 1% (. Irs forms 1040ez 2012 0025) of the stated redemption price at maturity multiplied by the number of full years from the date of original issue to maturity. Irs forms 1040ez 2012 Debt instruments with de minimis OID are not listed in this publication. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Also, the de minimis rules generally do not apply to tax-exempt obligations. Irs forms 1040ez 2012 Example 2. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Under the de minimis rule, you can treat the OID as zero because the $20 discount is less than $25. Irs forms 1040ez 2012 Example 3. Irs forms 1040ez 2012 Assume the same facts as Example 2, except the debt instrument was issued at $950. Irs forms 1040ez 2012 You must report part of the $50 OID each year because it is more than $25. Irs forms 1040ez 2012 Choice to report all interest as OID. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 See Constant yield method under Debt Instruments Issued After 1984, later, for more information. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 For more information, see Regulations section 1. Irs forms 1040ez 2012 1272-3. Irs forms 1040ez 2012 Purchase after date of original issue. Irs forms 1040ez 2012   A debt instrument you purchased after the date of original issue may have premium, acquisition premium, or market discount. Irs forms 1040ez 2012 If so, the OID reported to you on Form 1099-OID may have to be adjusted. Irs forms 1040ez 2012 For more information, see Showing an OID adjustment under How To Report OID, later. Irs forms 1040ez 2012 The following rules generally do not apply to contingent payment debt instruments. Irs forms 1040ez 2012 Adjustment for premium. Irs forms 1040ez 2012   If your debt instrument (other than an inflation-indexed debt instrument) has premium, do not report any OID as ordinary income. Irs forms 1040ez 2012 Your adjustment is the total OID shown on your Form 1099-OID. Irs forms 1040ez 2012 Adjustment for acquisition premium. Irs forms 1040ez 2012   If your debt instrument has acquisition premium, reduce the OID you report. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Adjustment for market discount. Irs forms 1040ez 2012   If your debt instrument has market discount that you choose to include in income currently, increase the OID you report. Irs forms 1040ez 2012 Your adjustment is the accrued market discount for the year. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 If you choose to use the constant yield method to figure accrued market discount, also see Figuring OID on Long-Term Debt Instruments, later. Irs forms 1040ez 2012 The constant yield method of figuring accrued OID, explained in those discussions under Constant yield method, is also used to figure accrued market discount. Irs forms 1040ez 2012 For more information concerning premium or market discount on an inflation-indexed debt instrument, see Regulations section 1. Irs forms 1040ez 2012 1275-7. Irs forms 1040ez 2012 Sale, exchange, or redemption. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 If you sold the debt instrument through a broker, you should receive Form 1099-B or an equivalent statement from the broker. Irs forms 1040ez 2012 Use the Form 1099-B or other statement and your brokerage statements to complete Form 8949, and Schedule D (Form 1040). Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 Your basis, generally, is your cost increased by the OID you have included in income each year you held it. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012   See chapter 4 of Publication 550 for more information about the tax treatment of the sale or redemption of discounted debt instruments. Irs forms 1040ez 2012 Example 4. Irs forms 1040ez 2012 Larry, a calendar year taxpayer, bought a corporate debt instrument at original issue for $86,235. Irs forms 1040ez 2012 00 on November 1 of Year 1. Irs forms 1040ez 2012 The 15-year debt instrument matures on October 31 of Year 16 at a stated redemption price of $100,000. Irs forms 1040ez 2012 The debt instrument provides for semiannual payments of interest at 10%. Irs forms 1040ez 2012 Assume the debt instrument is a capital asset in Larry's hands. Irs forms 1040ez 2012 The debt instrument has $13,765. Irs forms 1040ez 2012 00 of OID ($100,000 stated redemption price at maturity minus $86,235. Irs forms 1040ez 2012 00 issue price). Irs forms 1040ez 2012 Larry sold the debt instrument for $90,000 on November 1 of Year 4. Irs forms 1040ez 2012 Including the OID he will report for the period he held the debt instrument in Year 4, Larry has included $4,556. Irs forms 1040ez 2012 00 of OID in income and has increased his basis by that amount to $90,791. Irs forms 1040ez 2012 00. Irs forms 1040ez 2012 Larry has realized a loss of $791. Irs forms 1040ez 2012 00. Irs forms 1040ez 2012 All of Larry's loss is capital loss. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Form 1099-OID shows all OID income in box 1 except OID on a U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 Treasury obligation, which is shown in box 8. Irs forms 1040ez 2012 It also shows, in box 2, any qualified stated interest you must include in income. Irs forms 1040ez 2012 (However, any qualified stated interest on Treasury inflation-protected securities can be reported on Form 1099-INT in box 3. Irs forms 1040ez 2012 ) A copy of Form 1099-OID will be sent to the IRS. Irs forms 1040ez 2012 Do not attach your copy to your tax return. Irs forms 1040ez 2012 Keep it for your records. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Form 1099-OID not received. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 Refiguring OID. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 You bought the debt instrument at a premium or at an acquisition premium. Irs forms 1040ez 2012 The debt instrument is a stripped bond or coupon (including zero coupon bonds backed by U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 Treasury securities). Irs forms 1040ez 2012 The debt instrument is a contingent payment or inflation-indexed debt instrument. Irs forms 1040ez 2012 See the discussions under Figuring OID on Long-Term Debt Instruments or Figuring OID on Stripped Bonds and Coupons, later, for the specific computations. Irs forms 1040ez 2012 Refiguring interest. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 Nominee. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 ” You must file another Form 1099-OID for each actual owner, showing the OID for the owner. Irs forms 1040ez 2012 Show the owner of the debt instrument as the “recipient” and you as the “payer. Irs forms 1040ez 2012 ”   Complete Form 1099-OID and Form 1096 and file the forms with the Internal Revenue Service Center for your area. Irs forms 1040ez 2012 You must also give a copy of the Form 1099-OID to the actual owner. Irs forms 1040ez 2012 However, you are not required to file a nominee return to show amounts belonging to your spouse. Irs forms 1040ez 2012 See the Form 1099 instructions for more information. Irs forms 1040ez 2012   When preparing your tax return, follow the instructions under Showing an OID adjustment in the next discussion. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Form 1040 or Form 1040A required. Irs forms 1040ez 2012   You must use Form 1040 or Form 1040A (you cannot use Form 1040EZ) under either of the following conditions. Irs forms 1040ez 2012 You received a Form 1099-OID as a nominee for the actual owner. Irs forms 1040ez 2012 Your total interest and OID income for the year was more than $1,500. Irs forms 1040ez 2012 Form 1040 required. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Also, you must use Form 1040 if you were charged an early withdrawal penalty. Irs forms 1040ez 2012 Where to report. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 Include all OID and periodic interest shown on any Form 1099-OID, boxes 1, 2, and 8, you received for the tax year. Irs forms 1040ez 2012 Also include any other OID and interest income for which you did not receive a Form 1099. Irs forms 1040ez 2012 Showing an OID adjustment. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 If the OID, as adjusted, is less than the amount shown on Form 1099-OID, show the adjustment as follows. Irs forms 1040ez 2012 Under your last entry on line 1, subtotal all interest and OID income listed on line 1. Irs forms 1040ez 2012 Below the subtotal, write “Nominee Distribution” or “OID Adjustment” and show the OID you are not required to report. Irs forms 1040ez 2012 Subtract that OID from the subtotal and enter the result on line 2. Irs forms 1040ez 2012 If the OID, as adjusted, is more than the amount shown on Form 1099-OID, show the adjustment as follows. Irs forms 1040ez 2012 Under your last entry on line 1, subtotal all interest and OID income listed on line 1. Irs forms 1040ez 2012 Below the subtotal, write “OID Adjustment” and show the additional OID. Irs forms 1040ez 2012 Add that OID to the subtotal and enter the result on line 2. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 It also may depend on the type of the debt instrument. Irs forms 1040ez 2012 There are different rules for each of the following debt instruments. Irs forms 1040ez 2012 Corporate debt instruments issued after 1954 and before May 28, 1969, and government debt instruments issued after 1954 and before July 2, 1982. Irs forms 1040ez 2012 Corporate debt instruments issued after May 27, 1969, and before July 2, 1982. Irs forms 1040ez 2012 Debt instruments issued after July 1, 1982, and before 1985. Irs forms 1040ez 2012 Debt instruments issued after 1984 (other than debt instruments described in (5) and (6)). Irs forms 1040ez 2012 Contingent payment debt instruments issued after August 12, 1996. Irs forms 1040ez 2012 Inflation-indexed debt instruments (including Treasury inflation-protected securities) issued after January 5, 1997. Irs forms 1040ez 2012 Zero coupon bonds. Irs forms 1040ez 2012   The rules for figuring OID on zero coupon bonds backed by U. Irs forms 1040ez 2012 S. Irs forms 1040ez 2012 Treasury securities are discussed under Figuring OID on Stripped Bonds and Coupons, later. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 The OID, which is taxed as ordinary income, generally equals the following amount. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 If there is a loss on the sale of the debt instrument, the entire loss is a capital loss and no OID is reported. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 For information about showing the correct OID on your tax return, see the discussion under How To Report OID, earlier. Irs forms 1040ez 2012 Your basis in the debt instrument is increased by the OID you include in income. Irs forms 1040ez 2012 Form 1099-OID. Irs forms 1040ez 2012   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. Irs forms 1040ez 2012 However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. Irs forms 1040ez 2012 See Reduction for acquisition premium, later. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 irs. Irs forms 1040ez 2012 gov/pub1212 by clicking the link under Recent Developments. Irs forms 1040ez 2012 Form 1099-OID not received. Irs forms 1040ez 2012    The OID listed is for each $1,000 of redemption price. Irs forms 1040ez 2012 You must adjust the listed amount if your debt instrument has a different principal amount. Irs forms 1040ez 2012 For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. Irs forms 1040ez 2012   If you held the debt instrument the entire year, use the OID shown in Section I-A for a calendar year. Irs forms 1040ez 2012 (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. Irs forms 1040ez 2012 ) If you did not hold the debt instrument the entire year, figure your OID using the following method. Irs forms 1040ez 2012 Divide the OID shown by 12. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 This is the OID to include in income unless you paid an acquisition premium. Irs forms 1040ez 2012 The reduction for acquisition premium is discussed next. Irs forms 1040ez 2012 Reduction for acquisition premium. Irs forms 1040ez 2012   If you bought the debt instrument at an acquisition premium, figure the OID to include in income as follows. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 This is the monthly OID. Irs forms 1040ez 2012 Subtract from your cost the issue price and the accumulated OID from the date of issue to the date of purchase. Irs forms 1040ez 2012 (If the result is zero or less, stop here. Irs forms 1040ez 2012 You did not pay an acquisition premium. Irs forms 1040ez 2012 ) 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. Irs forms 1040ez 2012 Subtract the amount figured in (3) from the amount figured in (1). Irs forms 1040ez 2012 This is the OID to include in income for each month you hold the debt instrument during the year. Irs forms 1040ez 2012 Transfers during the month. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 Your holding period for this purpose begins the day you acquire the debt instrument and ends the day before you dispose of it. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 For information about showing the correct OID on your tax return, see How To Report OID, earlier. Irs forms 1040ez 2012 Form 1099-OID. Irs forms 1040ez 2012   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. Irs forms 1040ez 2012 However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. Irs forms 1040ez 2012 See Constant yield method and the discussions on acquisition premium that follow, later. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 irs. Irs forms 1040ez 2012 gov/pub1212 by clicking the link under Recent Developments. Irs forms 1040ez 2012 Form 1099-OID not received. Irs forms 1040ez 2012    The OID listed is for each $1,000 of redemption price. Irs forms 1040ez 2012 You must adjust the listed amount if your debt instrument has a different principal amount. Irs forms 1040ez 2012 For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. Irs forms 1040ez 2012   If you held the debt instrument the entire year, use the OID shown in Section I-A. Irs forms 1040ez 2012 (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. Irs forms 1040ez 2012 ) If you did not hold the debt instrument the entire year, figure your OID using either of the following methods. Irs forms 1040ez 2012 Method 1. Irs forms 1040ez 2012    Divide the total OID for a calendar year by 365 (366 for leap years). Irs forms 1040ez 2012 Multiply the result in (1) by the number of days you held the debt instrument during that particular year. Irs forms 1040ez 2012  This computation is an approximation and may result in a slightly higher OID than Method 2. Irs forms 1040ez 2012 Method 2. Irs forms 1040ez 2012    Look up the daily OID for the first accrual period you held the debt instrument during a calendar year. Irs forms 1040ez 2012 (See Accrual period under Constant yield method, next. Irs forms 1040ez 2012 ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. Irs forms 1040ez 2012 If you held the debt instrument for part of both accrual periods, repeat (1) and (2) for the second accrual period. Irs forms 1040ez 2012 Add the results of (2) and (3). Irs forms 1040ez 2012 This is the OID to include in income, unless you paid an acquisition premium. Irs forms 1040ez 2012 (The reduction for acquisition premium is discussed later. Irs forms 1040ez 2012 ) Constant yield method. Irs forms 1040ez 2012   This discussion shows how to figure OID on debt instruments issued after July 1, 1982, and before 1985, using a constant yield method. Irs forms 1040ez 2012 OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. Irs forms 1040ez 2012   Figure the OID allocable to any accrual period as follows. Irs forms 1040ez 2012 Multiply the adjusted issue price at the beginning of the accrual period by the debt instrument's yield to maturity. Irs forms 1040ez 2012 Subtract from the result in (1) any qualified stated interest allocable to the accrual period. Irs forms 1040ez 2012 Accrual period. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 Your tax year will usually include parts of two accrual periods. Irs forms 1040ez 2012 Daily OID. Irs forms 1040ez 2012   The OID for any accrual period is allocated equally to each day in the accrual period. Irs forms 1040ez 2012 You must include in income the sum of the OID amounts for each day you hold the debt instrument during the year. Irs forms 1040ez 2012 If your tax year includes parts of two or more accrual periods, you must include the proper daily OID amounts for each accrual period. Irs forms 1040ez 2012 Figuring daily OID. Irs forms 1040ez 2012   The daily OID for the initial accrual period is figured using the following formula. Irs forms 1040ez 2012   (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. Irs forms 1040ez 2012 Reduction for acquisition premium on debt instruments purchased before July 19, 1984. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Reduction for acquisition premium on debt instruments purchased after July 18, 1984. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 However, the method of figuring the daily acquisition premium is different from the method described in the preceding discussion. Irs forms 1040ez 2012 To figure the daily acquisition premium under this method, multiply the daily OID by the following fraction. Irs forms 1040ez 2012 The numerator is the acquisition premium. Irs forms 1040ez 2012 The denominator is the total OID remaining for the debt instrument after your purchase date. Irs forms 1040ez 2012 Section I-A is available at www. Irs forms 1040ez 2012 irs. Irs forms 1040ez 2012 gov/pub1212 and clicking the link under Recent Developments. Irs forms 1040ez 2012 Using Section I-A to figure accumulated OID. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 The amount from the “Total OID to January 1, YYYY” column for your debt instrument. Irs forms 1040ez 2012 The OID from January 1 of a calendar year to the date of purchase, figured as follows. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Add the amounts figured in (2a) and (2b). Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 You must include the OID in gross income whether or not you hold the debt instrument as a capital asset. Irs forms 1040ez 2012 Your basis in the debt instrument is increased by the OID you include in income. Irs forms 1040ez 2012 For information about showing the correct OID on your tax return, see How To Report OID, earlier. Irs forms 1040ez 2012 Form 1099-OID. Irs forms 1040ez 2012   You should receive a Form 1099-OID showing OID for the part of a calendar year you held the debt instrument. Irs forms 1040ez 2012 However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. Irs forms 1040ez 2012 See Constant yield method and Reduction for acquisition premium, later. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 See Contingent Payment Debt Instruments or Inflation-Indexed Debt Instruments, later. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 irs. Irs forms 1040ez 2012 gov/pub1212 by clicking the link under Recent Developments. Irs forms 1040ez 2012 Form 1099-OID not received. Irs forms 1040ez 2012   The OID listed is for each $1,000 of redemption price. Irs forms 1040ez 2012 You must adjust the listed amount if your debt instrument has a different principal amount. Irs forms 1040ez 2012 For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. Irs forms 1040ez 2012   Use the OID shown in Section I-B for a calendar year if you held the debt instrument the entire year. Irs forms 1040ez 2012 (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. Irs forms 1040ez 2012 ) If you did not hold the debt instrument the entire year, figure your OID as follows. Irs forms 1040ez 2012 Look up the daily OID for the first accrual period in which you held the debt instrument during a calendar year. Irs forms 1040ez 2012 (See Accrual period under Constant yield method, later. Irs forms 1040ez 2012 ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. Irs forms 1040ez 2012 Repeat (1) and (2) for any remaining accrual periods in which you held the debt instrument. Irs forms 1040ez 2012 Add the results of (2) and (3). Irs forms 1040ez 2012 This is the OID to include in income for that year, unless you paid an acquisition premium. Irs forms 1040ez 2012 (The reduction for acquisition premium is discussed later. Irs forms 1040ez 2012 ) Tax-exempt bond. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 You need to make this adjustment to determine if you have a gain or loss on a later disposition of the bond. Irs forms 1040ez 2012 In general, use the rules that follow to determine your OID. Irs forms 1040ez 2012 Constant yield method. Irs forms 1040ez 2012   This discussion shows how to figure OID on debt instruments issued after 1984 using a constant yield method. Irs forms 1040ez 2012 (The special rules that apply to contingent payment debt instruments and inflation-indexed debt instruments are explained later. Irs forms 1040ez 2012 ) OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. Irs forms 1040ez 2012   Figure the OID allocable to any accrual period as follows. Irs forms 1040ez 2012 Multiply the adjusted issue price at the beginning of the accrual period by a fraction. Irs forms 1040ez 2012 The numerator of the fraction is the debt instrument's yield to maturity and the denominator is the number of accrual periods per year. Irs forms 1040ez 2012 The yield must be stated appropriately taking into account the length of the particular accrual period. Irs forms 1040ez 2012 Subtract from the result in (1) any qualified stated interest allocable to the accrual period. Irs forms 1040ez 2012 Accrual period. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 For example, a debt instrument maturing on March 31 has accrual periods that end on September 30 and March 31 of each calendar year. Irs forms 1040ez 2012 Any short period is included as the first accrual period. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 However, the OID listed for these debt instruments in Section I-B has been figured using 6-month accrual periods. Irs forms 1040ez 2012 Daily OID. Irs forms 1040ez 2012   The OID for any accrual period is allocated equally to each day in the accrual period. Irs forms 1040ez 2012 Figure the amount to include in income by adding the OID for each day you hold the debt instrument during the year. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Figuring daily OID. Irs forms 1040ez 2012   The daily OID for the initial accrual period is figured using the following formula. Irs forms 1040ez 2012   (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. Irs forms 1040ez 2012 Example 5. Irs forms 1040ez 2012 On January 1 of Year 1, you bought a 15-year, 10% debt instrument of A Corporation at original issue for $86,235. Irs forms 1040ez 2012 17. Irs forms 1040ez 2012 According to the prospectus, the debt instrument matures on December 31 of Year 15 at a stated redemption price of $100,000. Irs forms 1040ez 2012 The yield to maturity is 12%, compounded semiannually. Irs forms 1040ez 2012 The debt instrument provides for qualified stated interest payments of $5,000 on June 30 and December 31 of each calendar year. Irs forms 1040ez 2012 The accrual periods are the 6-month periods ending on each of these dates. Irs forms 1040ez 2012 The number of days for the first accrual period (January 1 through June 30) is 181 days (182 for leap years). Irs forms 1040ez 2012 The daily OID for the first accrual period is figured as follows. Irs forms 1040ez 2012   ($86,235. Irs forms 1040ez 2012 17 x . Irs forms 1040ez 2012 12/2) – $5,000     181 days     = $174. Irs forms 1040ez 2012 11020 = $. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 17 + $174. Irs forms 1040ez 2012 11), or $86,409. Irs forms 1040ez 2012 28. Irs forms 1040ez 2012 The number of days for the second accrual period (July 1 through December 31) is 184 days. Irs forms 1040ez 2012 The daily OID for the second accrual period is figured as follows. Irs forms 1040ez 2012   ($86,409. Irs forms 1040ez 2012 28 x . Irs forms 1040ez 2012 12/2) – $5,000     184 days     = $184. Irs forms 1040ez 2012 55681 = $1. Irs forms 1040ez 2012 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, $174. Irs forms 1040ez 2012 11 ($. Irs forms 1040ez 2012 95665 × 182 days) plus $184. Irs forms 1040ez 2012 56 ($1. Irs forms 1040ez 2012 00303 × 184 days), or $358. Irs forms 1040ez 2012 67. Irs forms 1040ez 2012 Add the OID to the $10,000 interest you report on your income tax return for Year 1. Irs forms 1040ez 2012 Example 6. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Also, the interest payment dates are October 31 and April 30 of each calendar year. Irs forms 1040ez 2012 The accrual periods are the 6-month periods ending on each of these dates. Irs forms 1040ez 2012 The number of days for the first accrual period (May 1 through October 31) is 184 days. Irs forms 1040ez 2012 The daily OID for the first accrual period is figured as follows. Irs forms 1040ez 2012   ($86,235. Irs forms 1040ez 2012 17 x . Irs forms 1040ez 2012 12/2) – $5,000     184 days     = $174. Irs forms 1040ez 2012 11020 = $. Irs forms 1040ez 2012 94625   184           The number of days for the second accrual period (November 1 through April 30) is 181 days (182 for leap years). Irs forms 1040ez 2012 The daily OID for the second accrual period is figured as follows. Irs forms 1040ez 2012   ($86,409. Irs forms 1040ez 2012 28 x . Irs forms 1040ez 2012 12/2) – $5,000     181 days     = $184. Irs forms 1040ez 2012 55681 = $1. Irs forms 1040ez 2012 01965   181 If you hold the debt instrument through the end of Year 1, you must include $236. Irs forms 1040ez 2012 31 of OID in income. Irs forms 1040ez 2012 This is $174. Irs forms 1040ez 2012 11 ($. Irs forms 1040ez 2012 94625 × 184 days) for the period May 1 through October 31 plus $62. Irs forms 1040ez 2012 20 ($1. Irs forms 1040ez 2012 01965 × 61 days) for the period November 1 through December 31. Irs forms 1040ez 2012 The OID is added to the $5,000 interest income paid on October 31 of Year 1. Irs forms 1040ez 2012 Your basis in the debt instrument is increased by the OID you include in income. Irs forms 1040ez 2012 On January 1 of Year 2, your basis in the A Corporation debt instrument is $86,471. Irs forms 1040ez 2012 48 ($86,235. Irs forms 1040ez 2012 17 + $236. Irs forms 1040ez 2012 31). Irs forms 1040ez 2012 Short first accrual period. Irs forms 1040ez 2012   You may have to make adjustments if a debt instrument has a short first accrual period. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 (The remaining accrual periods begin on May 1 and November 1. Irs forms 1040ez 2012 ) For this short period, figure the daily OID as described earlier, but adjust the yield for the length of the short accrual period. Irs forms 1040ez 2012 You may use any reasonable compounding method in determining OID for a short period. Irs forms 1040ez 2012 Examples of reasonable compounding methods include continuous compounding and monthly compounding (that is, simple interest within a month). Irs forms 1040ez 2012 Consult your tax advisor for more information about making this computation. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 Reduction for acquisition premium. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 To figure the daily acquisition premium, multiply the daily OID by the following fraction. Irs forms 1040ez 2012 The numerator is the acquisition premium. Irs forms 1040ez 2012 The denominator is the total OID remaining for the debt instrument after your purchase date. Irs forms 1040ez 2012 Example 7. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 The adjusted issue price on November 1 of Year 1 is $86,409. Irs forms 1040ez 2012 28 ($86,235. Irs forms 1040ez 2012 17 + $174. Irs forms 1040ez 2012 11). Irs forms 1040ez 2012 In this case, you paid an acquisition premium of $590. Irs forms 1040ez 2012 72 ($87,000 − $86,409. Irs forms 1040ez 2012 28). Irs forms 1040ez 2012 The daily OID for the accrual period November 1 through April 30, reduced for the acquisition premium, is figured as follows. Irs forms 1040ez 2012 1) Daily OID on date of purchase (2nd accrual period) $1. Irs forms 1040ez 2012 01965*  2)  Acquisition premium $590. Irs forms 1040ez 2012 72    3)  Total OID remaining after purchase date ($13,764. Irs forms 1040ez 2012 83 − $174. Irs forms 1040ez 2012 11) 13,590. Irs forms 1040ez 2012 72   4) Line 2 ÷ line 3 . Irs forms 1040ez 2012 04346  5)  Line 1 × line 4 . Irs forms 1040ez 2012 04432  6)  Daily OID reduced for the acquisition premium. Irs forms 1040ez 2012 Line 1 − line 5 $0. Irs forms 1040ez 2012 97533  * As shown in Example 6. Irs forms 1040ez 2012 The total OID to include in income for Year 1 is $59. Irs forms 1040ez 2012 50 ($. Irs forms 1040ez 2012 97533 × 61 days). Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 In general, a contingent payment debt instrument provides for one or more payments that are contingent as to timing or amount. Irs forms 1040ez 2012 If you hold a contingent payment bond, you must report OID as it accrues each year. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 To figure OID accruals on contingent payment debt instruments, holders and issuers must use the noncontingent bond method. Irs forms 1040ez 2012 Noncontingent bond method. Irs forms 1040ez 2012    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. Irs forms 1040ez 2012 In general, holders and issuers accrue OID on this projected payment schedule using the constant yield method that applies to fixed payment debt instruments. Irs forms 1040ez 2012 When a contingent payment differs from the projected fixed amount, the holders and issuers make adjustments to their OID accruals. Irs forms 1040ez 2012 If the actual contingent payment is larger than expected, both the issuer and the holder increase their OID accruals. Irs forms 1040ez 2012 If the actual contingent payment is smaller than expected, holders and issuers generally decrease their OID accruals. Irs forms 1040ez 2012 Form 1099-OID. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 For example, the amount may not be correct if the contingent payment was different from the projected amount. Irs forms 1040ez 2012 If the amount in box 1 is not correct, you must figure the OID to report on your return under the following rules. Irs forms 1040ez 2012 For information on showing an OID adjustment on your tax return, see How To Report OID, earlier. Irs forms 1040ez 2012 Figuring OID. Irs forms 1040ez 2012   To figure OID on a contingent payment debt instrument, you need to know the “comparable yield” and “projected payment schedule” of the debt instrument. Irs forms 1040ez 2012 The issuer must make these available to you. Irs forms 1040ez 2012 Comparable yield. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 The comparable yield is determined as of the debt instrument's issue date. Irs forms 1040ez 2012 Projected payment schedule. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 The projected payment schedule is created by the issuer as of the debt instrument's issue date. Irs forms 1040ez 2012 It is used to determine the issuer's and holder's interest accruals and adjustments. Irs forms 1040ez 2012 Steps for figuring OID. Irs forms 1040ez 2012   Figure the OID on a contingent payment debt instrument in two steps. Irs forms 1040ez 2012 Figure the OID using the constant yield method (discussed earlier under Debt Instruments Issued After 1984 ) that applies to fixed payment debt instruments. Irs forms 1040ez 2012 Use the comparable yield as the yield to maturity. Irs forms 1040ez 2012 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). Irs forms 1040ez 2012 Do not treat any amount payable as qualified stated interest. Irs forms 1040ez 2012 Adjust the OID in (1) to account for actual contingent payments. Irs forms 1040ez 2012 If the contingent payment is greater than the projected fixed amount, you have a positive adjustment. Irs forms 1040ez 2012 If the contingent payment is less than the projected fixed amount, you have a negative adjustment. Irs forms 1040ez 2012 Net positive adjustment. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 Treat a net positive adjustment as additional OID for the tax year. Irs forms 1040ez 2012 Net negative adjustment. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 Use a net negative adjustment to offset OID on the debt instrument for the tax year. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 Basis adjustments. Irs forms 1040ez 2012   In general, increase your basis in a contingent payment debt instrument by the OID included in income. Irs forms 1040ez 2012 Your basis, however, is not affected by any negative or positive adjustments. Irs forms 1040ez 2012 Decrease your basis by any noncontingent payment received and the projected contingent payment scheduled to be received. Irs forms 1040ez 2012 Treatment of gain or loss on sale or exchange. Irs forms 1040ez 2012   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. Irs forms 1040ez 2012 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. Irs forms 1040ez 2012 If the debt instrument is a capital asset, treat any loss that is more than your prior OID accruals as a capital loss. Irs forms 1040ez 2012 See Regulations section 1. Irs forms 1040ez 2012 1275-4 for exceptions to these rules. Irs forms 1040ez 2012 Premium, acquisition premium, and market discount. Irs forms 1040ez 2012   The rules for accruing premium, acquisition premium, and market discount do not apply to a contingent payment debt instrument. Irs forms 1040ez 2012 See Regulations section 1. Irs forms 1040ez 2012 1275-4 to determine how to account for these items. Irs forms 1040ez 2012 Inflation-Indexed Debt Instruments This discussion shows how you figure OID on certain inflation-indexed debt instruments issued after January 5, 1997. Irs forms 1040ez 2012 An inflation-indexed debt instrument is generally a debt instrument on which the payments are adjusted for inflation and d