Original Issue Discount (Form 1099-OID)
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Original issue discount (OID) income is a form of taxable interest income. You are usually issued a Form 1099-OID that shows the amount of OID that needs to be reported as interest income on your tax return. OID happens when you have purchased a bond, note, or other long-term debt instrument for a lower price than its face value.
For example: If you purchased a bond with a face value of $1,000 for $800, then you have $200 of OID that needs to be recognized over the remaining life of the bond. If the bond had 5 more years before its maturity date when you purchased the bond, then you would recognize $40 in OID as interest income on each of your tax returns over the next five years. The $40 should be shown on a Form 1099-OID that you can enter on the Original Issue Discount (Form 1099-OID) screen.
Original issue discount (OID) income is a form of taxable interest income. You are usually issued a Form 1099-OID that shows the amount of OID that needs to be reported as interest income on your tax return. OID happens when you have purchased a bond, note, or other long-term debt instrument for a lower price than its face value.
For example: If you purchased a bond with a face value of $1,000 for $800, then you have $200 of OID that needs to be recognized over the remaining life of the bond. If the bond had 5 more years before its maturity date when you purchased the bond, then you would recognize $40 in OID as interest income on each of your tax returns over the next five years. The $40 should be shown on a Form 1099-OID that you can enter on the Original Issue Discount (Form 1099-OID) screen.
