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9696 VOID CORRECTED 1 Original issue discount for 1998 OMB No. 1545-0117 PAYER'S name, street address, city, state, ZIP code, and telephone no. $2 Other periodic interest Form 98 1099-OID 4 Federal

How to fill out original issue discount

How to fill out original issue discount:

1. Begin by gathering all the necessary information and documents related to the original issue discount, including the bond or note in question and any relevant financial statements or tax forms.
2. Determine the appropriate form to report the original issue discount. This will typically be either Form 1099-OID for the issuer or Form 8281 for the holder.
3. Familiarize yourself with the specific instructions provided by the IRS for filling out the chosen form. These instructions will outline the required fields, calculations, and any additional documentation that may be needed.
4. Enter the relevant information into the appropriate fields of the form, ensuring accuracy and completeness. This may include details such as the issuer's name and identification number, the holder's name and identification number, the bond or note's issue date and maturity date, the OID amount, and any adjustments or spread.
5. Double-check all the entered information to minimize errors or discrepancies that could trigger an audit or penalties.
6. Calculate any adjustments or spread required for tax purposes, if applicable. This may involve utilizing additional schedules or worksheets provided by the IRS.
7. Review the completed form for accuracy and consistency with the supporting documents. Make any necessary corrections or revisions before finalizing the submission.
8. File the completed form with the IRS by the designated deadline, generally by February 28th for paper filing or March 31st for electronic filing.

Who needs original issue discount:

1. Issuers of bonds or notes that are sold at a discount from their face value are typically required to report the original issue discount to the IRS. This allows the IRS to track and tax the accrued interest over the life of the bond or note.
2. Holders of bonds or notes that were purchased at a discount may also need to report the original issue discount and pay taxes on the accrued interest. The specific requirements and thresholds for reporting and taxation vary depending on factors such as the type of security and the holder's tax status.

It is advised to consult with a tax professional or refer to the IRS guidelines for precise instructions and to ensure compliance with tax laws and regulations.

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What is original issue discount?

Original issue discount (OID) is the difference between the stated redemption price at maturity and the issue price of a fixed-income security.

Who is required to file original issue discount?

The issuer of a fixed-income security is generally required to file original issue discount.

How to fill out original issue discount?

To fill out original issue discount, the issuer needs to report the OID on Form 1099-OID and provide a copy to the recipient of the security.

What is the purpose of original issue discount?

The purpose of original issue discount is to account for the accrual of interest income over the life of a fixed-income security.

What information must be reported on original issue discount?

The issuer must report the issuer's name, issuer's identification number, recipient's name and identification number, the amount of OID, and other relevant details.