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Turbotax Military Discount

Tax 1040ezMilitary Free Turbo TaxEfile Tax Return Online Free Federal And StateHow To Amend A Tax Return 2013Irs 1040ez OnlineFile 2012 Taxes Free OnlineIncome Tax Return PreparationHow To File An Amended Tax Return For 20131040nr Ez OnlineHow To Revise Tax ReturnTax Amendment Form1040ez GovH And R Block Login1040 Ez Electronic FilingIrs 1040x Form InstructionsTurbotax State Efile CouponH&r Free TaxTurbotax 1040ez2012 Irs Form 1040ezSend Federal Income Tax Form 1040ezPreparing Form 1040xEz 1040 Form 2011Tax AmendmentIrs FormsHow To Fill Out 1040xIrs E File1040 Ez 2014Free 2011 Tax Software DownloadHrblock TaxcutFiling 1040ez ElectronicallyInformation About Tax Returns For Students2011 Irs Forms And Publications1040x Filing Instructions1040ez Form For 2014How Do You Fill Out A 1040x FormMilitary Tax Calculator2012 Federal Tax FormsHow To File Your 2012 Tax ReturnFiling State Taxes For FreeFiling Tax Return Someone Love Died

Turbotax Military Discount

Turbotax military discount Part Six -   Figuring Your Taxes and Credits The eight chapters in this part explain how to figure your tax and how to figure the tax of certain children who have more than $2,000 of unearned income. Turbotax military discount They also discuss tax credits that, unlike deductions, are subtracted directly from your tax and reduce your tax dollar for dollar. Turbotax military discount Chapter 36 discusses the earned income credit. Turbotax military discount Chapter 37 discusses a wide variety of other credits, such as the adoption credit. Turbotax military discount Table of Contents 30. Turbotax military discount   How To Figure Your TaxIntroduction Figuring Your Tax Alternative Minimum Tax (AMT) Tax Figured by IRSFiling the Return 31. Turbotax military discount   Tax on Unearned Income of Certain ChildrenWhat's New Introduction Useful Items - You may want to see: Which Parent's Return To UseParents Who Do Not File a Joint Return Parent's Election To Report Child's Interest and DividendsEffect of Making the Election Figuring Child's Income Figuring Additional Tax Tax for Certain Children Who Have Unearned IncomeProviding Parental Information (Form 8615, lines A–C) Step 1. Turbotax military discount Figuring the Child's Net Unearned Income (Form 8615, Part I) Step 2. Turbotax military discount Figuring Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) Step 3. Turbotax military discount Figuring the Child's Tax (Form 8615, Part III) 32. Turbotax military discount   Child and Dependent Care CreditReminders Introduction Useful Items - You may want to see: Tests To Claim the CreditQualifying Person Test Earned Income Test Work-Related Expense Test Joint Return Test Provider Identification Test How To Figure the CreditFiguring Total Work-Related Expenses Earned Income Limit Dollar Limit Amount of Credit How To Claim the CreditTax credit not refundable. Turbotax military discount Employment Taxes for Household Employers 33. Turbotax military discount   Credit for the Elderly or the DisabledIntroduction Useful Items - You may want to see: Are You Eligible for the Credit?Qualified Individual Income Limits How to Claim the CreditCredit Figured for You Credit Figured by You 34. Turbotax military discount   Child Tax CreditIntroduction Useful Items - You may want to see: Qualifying Child Amount of CreditLimits on the Credit Claiming the Credit Additional Child Tax Credit Completing Schedule 8812 (Form 1040A or 1040)Part I Parts II–IV 35. Turbotax military discount   Education CreditsIntroduction Useful Items - You may want to see: Who Can Claim an Education Credit Qualified Education ExpensesNo Double Benefit Allowed Adjustments to Qualified Education Expenses 36. Turbotax military discount   Earned Income Credit (EIC)What's New Reminders Introduction Useful Items - You may want to see: Do You Qualify for the Credit?If Improper Claim Made in Prior Year Part A. Turbotax military discount Rules for EveryoneRule 1. Turbotax military discount Your AGI Must Be Less Than: Rule 2. Turbotax military discount You Must Have a Valid Social Security Number (SSN) Rule 3. Turbotax military discount Your Filing Status Cannot Be Married Filing Separately Rule 4. Turbotax military discount You Must Be a U. Turbotax military discount S. Turbotax military discount Citizen or Resident Alien All Year Rule 5. Turbotax military discount You Cannot File Form 2555 or Form 2555-EZ Rule 6. Turbotax military discount Your Investment Income Must Be $3,300 or Less Rule 7. Turbotax military discount You Must Have Earned Income Part B. Turbotax military discount Rules If You Have a Qualifying ChildRule 8. Turbotax military discount Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Rule 9. Turbotax military discount Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Rule 10. Turbotax military discount You Cannot Be a Qualifying Child of Another Taxpayer Part C. Turbotax military discount Rules If You Do Not Have a Qualifying ChildRule 11. Turbotax military discount You Must Be at Least Age 25 but Under Age 65 Rule 12. Turbotax military discount You Cannot Be the Dependent of Another Person Rule 13. Turbotax military discount You Cannot Be a Qualifying Child of Another Taxpayer Rule 14. Turbotax military discount You Must Have Lived in the United States More Than Half of the Year Part D. Turbotax military discount Figuring and Claiming the EICRule 15. Turbotax military discount Your Earned Income Must Be Less Than: IRS Will Figure the EIC for You How To Figure the EIC Yourself ExamplesExample 1. Turbotax military discount John and Janet Smith (Form 1040A) Example 2. Turbotax military discount Kelly Green (Form 1040EZ) 37. Turbotax military discount   Other CreditsWhat's New Introduction Useful Items - You may want to see: Nonrefundable CreditsAdoption Credit Alternative Motor Vehicle Credit Alternative Fuel Vehicle Refueling Property Credit Credit to Holders of Tax Credit Bonds Foreign Tax Credit Mortgage Interest Credit Nonrefundable Credit for Prior Year Minimum Tax Plug-in Electric Drive Motor Vehicle Credit Residential Energy Credits Retirement Savings Contributions Credit (Saver's Credit) Refundable CreditsCredit for Tax on Undistributed Capital Gain Health Coverage Tax Credit Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld Prev  Up  Next   Home   More Online Publications
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Consumer Protection Offices

City, county, regional, and state consumer offices offer a variety of important services. They might mediate complaints, conduct investigations, prosecute offenders of consumer laws, license and regulate professional service providers, provide educational materials and advocate for consumer rights. To save time, call before sending a written complaint. Ask if the office handles the type of complaint you have and if complaint forms are provided.

State Consumer Protection Offices

Alabama Office of the Attorney General

Website: Alabama Office of the Attorney General

Address: Alabama Office of the Attorney General
Consumer Protection Section
501 Washington Ave.
Montgomery, AL 36104

Phone Number: 334-242-7335

Toll-free: 1-800-392-5658 (AL)

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Banking Authorities

The officials listed in this section regulate and supervise state-chartered banks. Many of them handle or refer problems and complaints about other types of financial institutions as well. Some also answer general questions about banking and consumer credit. If you are dealing with a federally chartered bank, check Federal Agencies.

State Banking Department

Website: State Banking Department

Address: State Banking Department
PO Box 4600
Montgomery, AL 36103-4600

Phone Number: 334-242-3452

Toll-free: 1-866-465-2279

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Insurance Regulators

Each state has its own laws and regulations for each type of insurance. The officials listed in this section enforce these laws. Many of these offices can also provide you with information to help you make informed insurance buying decisions.

Department of Insurance

Website: Department of Insurance

Address: Department of Insurance
PO Box 303351
Montgomery, AL 36130-3351

Phone Number: 334-241-4141 (Consumer Services) 334-269-3550 (Consumer Services)

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Securities Administrators

Each state has its own laws and regulations for securities brokers and securities - including stocks, mutual funds, commodities, real estate, etc. The officials and agencies listed in this section enforce these laws and regulations. Many of these offices can also provide information to help you make informed investment decisions.

Securities Commission

Website: Securities Commission

Address: Securities Commission
PO Box 304700
Montgomery, AL 36130-4700

Phone Number: 334-242-2984

Toll-free: 1-800-222-1253 (AL)

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Utility Commissions

State Utility Commissions regulate services and rates for gas, electricity and telephones within your state. In some states, the utility commissions regulate other services such as water, transportation, and the moving of household goods. Many utility commissions handle consumer complaints. Sometimes, if a number of complaints are received about the same utility matter, they will conduct investigations.

Public Service Commission

Website: Public Service Commission

Address: Public Service Commission
Consumer Services
PO Box 304260
Montgomery, AL 36130

Phone Number: 334-242-5218

Toll-free: 1-800-392-8050 (AL)

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The Turbotax Military Discount

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