Table of Contents
For the latest information about developments related to Pub. 1212, such as legislation enacted after it was published, go to www.irs.gov/pub1212.
Effective January 1, 2014, upon the sale of a debt instrument that is a covered security under Regulations section 1.6045-1(a)(15), securities brokers and other affected persons must report to the IRS and customers (on Form 1099-B, Proceeds From Broker and Barter Exchange Transactions) the adjusted basis of the debt instrument and whether any gain or loss upon the sale is long-term, short term, or ordinary. See TD 9616, available at www.irs.gov/irb/2013-20_IRB/ar07.html. For more information, see the 2014 Instructions for Form 1099-B. Contingent payment debt instruments, variable rate debt instruments, inflation protected debt instruments, stripped bonds and stripped coupons, and certain other debt instruments that are covered securities are not subject to reporting until January 1, 2016. See Regulations section 1.6045-1(n)(3).
Effective January 1, 2014, there are new reporting requirements for a debt instrument that is a covered security under Regulations section 1.6045-1(a)(15)(i)(C) that is acquired by a taxpayer with market discount, bond premium, or acquisition premium. See TD 9616, available at www.irs.gov/irb/2013-20_IRB/ar07.html. For more information, see the 2014 Instructions for Forms 1099-INT and 1099-OID.
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This publication has two purposes. Its primary purpose is to help brokers and other middlemen identify publicly offered original issue discount (OID) debt instruments they may hold as nominees for the true owners, so they can file Forms 1099-OID or Forms 1099-INT as required. The other purpose of the publication is to help owners of publicly offered OID debt instruments determine how much OID to report on their income tax returns.
The list of publicly offered OID debt instruments (OID list) is on the IRS website. The original issue discount tables, Sections I-A through III-F, are only available on the IRS website at www.irs.gov/pub1212 by clicking the link under Recent Developments. The tables are posted to the website in late November or early December of each year. The information on these lists comes from the issuers of the debt instruments and from financial publications and is updated annually. (However, see Debt Instruments Not on the OID List, later.)
Brokers and other middlemen can rely on this list to determine, for information reporting purposes, whether a debt instrument was issued at a discount and the OID to be reported on information returns. However, because the information in the list has generally not been verified by the IRS as correct, the following tax matters are subject to change upon examination by the IRS.
The OID reported by owners of a debt instrument on their income tax returns.
The issuer's classification of an instrument as debt for federal income tax purposes.
IRS OID Publication Project
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515 Withholding of Tax on Nonresident Aliens and Foreign Entities
550 Investment Income and Expenses
938 Real Estate Mortgage Investment Conduits (REMICs) Reporting Information (And Other Collateralized Debt Obligations (CDOs)).
Form (and Instructions)
1096 Annual Summary and Transmittal of U.S. Information Returns
1099-B Proceeds From Broker and Barter Exchange Transactions
1099-INT Interest Income
1099-OID Original Issue Discount
8949 Sales and Other Dispositions of Capital Assets
Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends
Schedule D (Form 1040) Capital Gains and Losses
W-8 Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY
See How To Get Tax Help near the end of this publication for information about getting publications and forms.
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