Contents

Introduction .................. 2

Definitions ................... 2

Debt Instruments in the OID Tables .... 3

Debt Instruments Not in the OID 

Tables ................... 3

Information for Brokers and Other 

Middlemen ................ 3

Short-Term Obligations 

Redeemed at Maturity ........ 4

Long-Term Debt Instruments ...... 4

Certificates of Deposit .......... 5

Bearer Bonds and Coupons ....... 5

Backup Withholding ........... 5

Information for Owners of OID Debt 

Instruments ............... 5

Form 1099-OID .............. 6

How To Report OID ........... 7

Figuring OID on Long-Term 

Debt Instruments ........... 7

Debt Instruments Issued 

After July 1, 1982, and 

Before 1985 ........... 8

Debt Instruments Issued 

After 1984 ............ 8

Contingent Payment Debt 

Instruments .......... 10

Inflation-Indexed Debt 

Instruments .......... 11

Figuring OID on Stripped Bonds 

and Coupons ............ 12

Form 1099-OID .......... 12

Tax-Exempt Bonds and 

Coupons ........... 12

Debt Instruments and 

Coupons Purchased 

After July 1, 1982, and 

Before 1985 .......... 13

Debt Instruments and 

Coupons Purchased 

After 1984 ........... 13

How To Get Tax Help ............ 14

Index ..................... 18

Section references are to the Internal Revenue 

Code unless otherwise noted.

Future Developments

For the latest information about developments 

related to Pub. 1212, such as legislation 

enacted after it was published, go to IRS.gov/

Pub1212.

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Publication 1212

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Cat. No. 61273T

Guide to Original 

Issue Discount 

(OID) 

Instruments

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Introduction

This publication has two purposes. Its primary 

purpose is to help brokers and other middlemen 

identify publicly offered original issue discount 

(OID) debt instruments they may hold as nominees for the true owners, so they can file Forms 

1099-OID or Forms 1099-INT, as required. The 

other purpose of the publication is to help owners of publicly offered OID debt instruments determine how much OID to report on their income 

tax returns.

Original issue discount (OID) tables. The tables of publicly offered OID debt instruments 

(OID tables) are available at IRS.gov/Pub1212, 

by clicking the link under Recent Developments. 

Details about the deadlines to furnish and file 

information returns that rely on these tables and 

how to obtain an extension to these deadlines 

can be found in the 2023 General Instructions 

for Certain Information Returns, available at 

IRS.gov/1099GeneralInstructions. The information in the OID tables comes from the issuers of 

the debt instruments and from financial publications and is updated annually. (However, see 

Debt Instruments Not in the OID Tables, later.)

Brokers and other middlemen can rely on 

the OID tables to determine, for information reporting purposes, whether a debt instrument 

was issued at a discount and the OID to be reported on information returns. However, because the information in the OID tables has 

generally not been verified by the IRS as correct, the following tax matters are subject to 

change upon examination by the IRS.

• The OID reported by owners of a debt instrument on their income tax returns.

• The issuer's classification of an instrument 

as debt for federal income tax purposes.

• The adjusted basis of a debt instrument.

Instructions for issuers of OID debt instruments. In general, issuers of publicly offered 

OID debt instruments must file Form 8281 

within 30 days after the date of issuance, and, if 

registered with the Securities and Exchange 

Commission (SEC), within 30 days after registration with the SEC. A separate Form 8281 

must be filed for each issuance or SEC registration. For more information, see Form 8281 and 

its instructions, available at IRS.gov/Form8281.

Issuers should report errors in and 

omissions from the list in writing at the 

following address:

IRS OID Publication Project

SE:W:CAR:MP:TFP

1111 Constitution Ave. NW, IR-6526

Washington, DC 20224

REMIC and CDO information reporting requirements. Brokers and other middlemen 

must follow special information reporting requirements for real estate mortgage investment 

conduit (REMIC) regular interests, and collateralized debt obligation (CDO) interests. The 

rules are explained in Pub. 938.

Holders of interests in REMICs and CDOs 

should see chapter 1 of Pub. 550 for information 

on REMICs and CDOs.

Comments and suggestions. We welcome 

your comments about this publication and suggestions for future editions.

You can send us comments through 

IRS.gov/FormComments. Or, you can write to 

the Internal Revenue Service, Tax Forms and 

Publications, 1111 Constitution Ave. NW, 

IR-6526, Washington, DC 20224.

Although we can’t respond individually to 

each comment received, we do appreciate your 

feedback and will consider your comments and 

suggestions as we revise our tax forms, instructions, and publications. Don’t send tax questions, tax returns, or payments to the above address.

Getting answers to your tax questions. 

If you have a tax question not answered by this 

publication or the How To Get Tax Help section 

at the end of this publication, go to the IRS Interactive Tax Assistant page at IRS.gov/

Help/ITA where you can find topics by using the 

search feature or viewing the categories listed.

Getting tax forms, instructions, and publications. Go to IRS.gov/Forms to download 

current and prior-year forms, instructions, and 

publications.

Ordering tax forms, instructions, and 

publications. Go to IRS.gov/OrderForms to order current forms, instructions, and publications; call 800-829-3676 to order prior-year 

forms and instructions. The IRS will process 

your order for forms and publications as soon 

as possible. Don’t resubmit requests you’ve already sent us. You can get forms and publications faster online.

Useful Items

You may want to see:

Publication

Withholding of Tax on Nonresident 

Aliens and Foreign Entities

0 Investment Income and Expenses

938 Real Estate Mortgage Investment 

Conduits (REMICs) Reporting 

Information (And Other Collateralized 

Debt Obligations (CDOs))

Form (and Instructions)

1096 Annual Summary and Transmittal of 

U.S. Information Returns

1099-B Proceeds From Broker and Barter 

Exchange Transactions

1099-INTnterest Income

1099-OIDriginal Issue Discount

8281 Information Return for Publicly 

Offered Original Issue Discount 

Instruments

 515

 550

 938

 1096

 1099-B

 1099-INT

 1099-OID

 8281

Sales and Other Dispositions of 

Capital Assets

Interest and 

Ordinary Dividends

Capital Gains 

and Losses

Instructions for the Requester of 

Forms W-8BEN, W-8BEN-E, 

W-8ECI, W-8EXP, and W-8IMY

See How To Get Tax Help at the end of this publication for information about getting publications and forms.

Definitions

The following terms are used throughout this 

publication. “Original issue discount” is defined 

first. The other terms are listed alphabetically.

Original issue discount (OID). OID is a form 

of interest. 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). Zero coupon bonds and debt instruments that pay no stated interest until maturity 

are examples of debt instruments that have 

OID.

Accrual period. An accrual period is an interval of time used to measure OID. The length of 

an accrual period can be 6 months, a year, or 

some other period no longer than 1 year, depending on when the debt instrument was issued.

Acquisition premium. 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. A purchaser reduces any OID income by the acquisition premium, as discussed under Information for 

Owners of OID Debt Instruments, later.

If the purchaser’s adjusted basis exceeds 

the total of all amounts payable under the debt 

instrument (other than qualified stated interest) 

after the date of purchase, then the debt instrument has premium instead of acquisition premium. See Premium, later.

Adjusted issue price. 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. In general, the adjusted issue 

price at the beginning of the debt instrument's 

first accrual period is its issue price. 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.

Debt instrument. 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). 

It generally does not include an annuity contract.

 8949

 Schedule B (Form 1040)

 Schedule D (Form 1040)

 W-8

2 Publication 1212 (January 2024)
Issue price. For debt instruments listed in Section I-A and Section I-B, of the Final Release of 

Original Issue Discount (OID) Tables, the issue 

price is generally the initial offering price to the 

public (excluding bond houses and brokers) at 

which a substantial amount of these instruments was sold.

Market discount. A debt instrument is generally acquired with market discount if its stated 

redemption price at maturity is greater than its 

basis after its acquisition. In general, a debt instrument is purchased in the secondary market 

at a market discount when the value of the debt 

instrument has decreased since the instrument’s issue date (for example, because of an 

increase in interest rates). An OID debt instrument generally 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. The market discount is the difference 

between the issue price plus accrued OID and 

your adjusted basis.

Premium. 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. 

The premium is the excess of the adjusted basis over the payable amounts.

Premium will generally eliminate the future 

reporting of OID in income by the purchaser, as 

discussed under Information for Owners of OID 

Debt Instruments, later. See Pub. 550 for more 

information on the tax treatment of bond premium.

Qualified stated interest. 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.

Stated redemption price at maturity. 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.

Yield to maturity (YTM). 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. The YTM is 

generally shown on the face of the debt instrument or in the literature you receive from your 

broker. If you do not have this information, consult your broker, tax advisor, or the issuer.

Debt Instruments in the 

OID Tables

The OID tables, available at IRS.gov/Pub1212, 

under Recent Developments, can be used by 

brokers and other middlemen to prepare information returns.

If you own a debt instrument included 

in the tables, you generally should not 

rely on the information in the OID tables to determine (or compare) the OID to be 

reported on your tax return, but you should use, 

as a starting point, the information supplied to 

you on Form 1099-OID. The OID amounts listed 

are figured without reference to the price or date 

at which you acquired the debt instrument. 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.

The following discussions explain what information is contained in each section of the tables.

Section I. This section contains publicly offered, long-term debt instruments.

• Section I-A: Corporate Debt Instruments 

Issued Before 1985.

• Section I-B:

Corporate Debt Instruments Issued 

After 1984.

Taxable obligations issued by a state 

or a local government.

• Section I-C: Inflation-Indexed Debt Instruments.

For each publicly offered debt instrument in 

Section I, the list contains the following information.

• The name of the issuer.

• The Committee on Uniform Security Identification Procedures (CUSIP) number.

• The issue date.

• The maturity date.

• The issue price expressed as a percent of 

principal or of stated redemption price at 

maturity.

• The annual stated or coupon interest rate. 

(This rate is shown as 0.00 if no annual interest payments are provided.)

• The YTM will be added to Section I-B for 

bonds issued after December 31, 2006.

• The total OID accrued up to January 1 of a 

calendar year. (This information is not 

available for every instrument.)

• 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.

• The total OID per $1,000 of principal or 

maturity value for a calendar year and a 

subsequent year.

Section II. This section contains stripped coupons and principal components of U.S. Treasury and Government-Sponsored Enterprise 

debt instruments. 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. 

This section also includes debt instruments 

backed by U.S. Treasury securities that represent ownership interests in those securities.

The obligations listed in Section II are arranged by maturity date. The amounts listed are 

the total OID for a calendar year per $1,000 of 

redemption price.

CAUTION

!

Section III. This section contains short-term 

discount obligations.

• Section III-A: Short-Term U.S. Treasury 

Bills.

• Section III-B: Federal Home Loan Banks.

• Section III-C: Federal National Mortgage 

Association.

• Section III-D: Federal Farm Credit Banks.

• Section III-E: Federal Home Loan Mortgage Corporation.

• Section III-F: Federal Agricultural Mortgage 

Corporation.

Information that supplements Section III-A is available on the Internet at 

TreasuryDirect.gov/tdhome.htm.

The short-term obligations listed in this section are arranged by maturity date. 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. 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.

Debt Instruments Not in 

the OID Tables

The list of debt instruments discussed earlier 

does not contain the following items.

• U.S. savings bonds.

• Certificates of deposit and other 

face-amount certificates issued at a discount, including syndicated certificates of 

deposit.

• Obligations issued by tax-exempt organizations.

• OID debt instruments that matured or were 

entirely called by the issuer before the tables were posted on the IRS website.

• Mortgage-backed securities and mortgage 

participation certificates.

• Short-term obligations, other than the obligations listed in Section III.

• Debt instruments issued at a discount by 

states or their political subdivisions if these 

debt instruments are tax-exempt obligations.

• REMIC regular interests and CDOs.

• Commercial paper and banker's acceptances issued at a discount.

• Obligations issued at a discount by individuals.

• Foreign obligations not traded in the United 

States and obligations not issued in the 

United States.

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.

In general, you must file a Form 1099-INT or 

Form 1099-OID 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. 

Publication 1212 (January 2024) 3
You must also file a Form 1099-INT or Form 

1099-OID if you were required to deduct and 

withhold tax, even if the interest or OID is less 

than $10. See Backup Withholding, later.

If you must file a Form 1099-INT or Form 

1099-OID, furnish a copy to the owner of the 

debt instrument by January 31 in the year it is 

due, or February 15 in the year it is due if the 

Form 1099-INT or Form 1099-OID is furnished 

as part of a consolidated reporting statement. 

File all your Forms 1099 with the IRS, accompanied by Form 1096, by February 28 in the year 

they are due (March 31 if you file electronically).

Electronic payee statements. You can issue 

Form 1099-INT or Form 1099-OID electronically 

with the consent of the recipient.

More information. For more information, including penalties for failure to file (or furnish) required information returns or statements, see 

the current General Instructions for Certain 

Information Returns, available at IRS.gov/

1099GeneralInstructions.

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.

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.

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. A special rule is used to determine 

the original issue price for information reporting 

on U.S. Treasury bills (T-bills) listed in Section III-A. 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. This noncompetitive discount price is 

the issue price (expressed as a percent of principal) shown in Section III-A.

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.

Example 1. There are 13-week and 

26-week T-bills maturing on the same date as 

the T-bill being redeemed. The price actually 

paid by the owner cannot be established by 

owner or middleman records. 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. The interest you report on Form 

1099-INT is the OID (per $1,000 of principal) 

shown in Section III-A for that obligation.

Long-Term Debt Instruments

If you hold a long-term OID debt instrument as a 

nominee for the true owner, you must generally 

file Form 1099-OID. For this purpose, you can 

rely on Section I of the OID tables to determine 

the following information.

• Whether a debt instrument has OID.

• The OID to be reported on the Form 

1099-OID.

In general, you must report OID on publicly 

offered, long-term debt instruments listed in 

Section I. You can also report OID on other 

long-term debt instruments.

Form 1099-OID. Form 1099-OID for a calendar 

year shows the following information.

• Box 1. The OID for the actual dates the 

owner held the debt instruments during a 

calendar year. To determine this amount, 

see Figuring OID, later. You may report a 

net amount of OID that reflects the offset of 

OID by the amount of acquisition premium 

amortization for the year. If you do so, 

leave box 6 blank.

• Box 2. The qualified stated interest paid or 

credited during the calendar year. Interest 

reported here is not reported on Form 

1099-INT. The qualified stated interest on 

Treasury inflation-protected securities 

(TIPS) may be reported on Form 1099-INT 

in box 3 instead.

• Box 3. Any interest or principal forfeited because of an early withdrawal that the owner 

can deduct from gross income. Do not reduce the amounts in boxes 1 and 2 by the 

forfeiture.

• Box 4. Any backup withholding for this debt 

instrument.

• Box 5. For a covered security acquired with 

market discount under Regulations section 

1.6045-1(a)(15), enter the amount of market discount that accrued during the period 

the holder owned the debt instrument, provided the holder notified you of an election 

made under section 1278(b) to include 

market discount in income as it accrued. 

Follow the instructions in Regulations section 1.6045-1(n) to determine the accruals 

of market discount.

• Box 6. For a covered security acquired with 

acquisition premium, enter the amount of 

acquisition premium amortization for the 

period the holder owned the debt instrument. If a net amount of OID is reported in 

box 1, box 8, or box 11, as applicable, 

leave this box blank. Follow the instructions 

in Regulations section 1.6045-1(n) to determine the amortization of acquisition premium.

• Box 7. The CUSIP number, if any. 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 12.50 2006). If 

the issuer of the debt instrument is other 

than the payer, show the name of the issuer in this box.

• Box 8. The OID on a U.S. Treasury obligation for the part of the year the owner held 

the debt instrument. You may report a net 

amount of OID that reflects the offset of 

OID by the amount of acquisition premium 

amortization for the year. If you do so, 

leave box 6 blank.

• Box 9. Investment expenses passed on to 

holders of a single-class REMIC. Caution. 

This amount is not deductible.

• Box 10. For a taxable covered security acquired at a premium, enter the amount of 

bond premium amortization allocable to 

the interest paid during the tax year, unless 

you were notified in writing that the holder 

did not want to amortize bond premium under section 171. See Regulations sections 

1.6045-1(n)(5) and 1.6049-9(b). If you are 

required to report bond premium amortization and you reported a net amount of interest in box 2, leave this box blank.

• Box 11. Use to report any tax-exempt OID.

• Boxes 12–14. Use to report any state income tax withheld for this debt instrument.

Figuring OID. You can determine the OID on a 

long-term debt instrument by using either of the 

following.

• Section I of the OID tables.

• The income tax regulations.

Using Section I. If the owner held the debt 

instrument for the entire calendar year, report 

the OID shown in Section I for the calendar 

year. 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. For example, if the debt instrument's 

stated redemption price at maturity is $500, report one-half the listed OID.

If the owner held the debt instrument for less 

than the entire calendar year, figure the OID to 

report as follows.

1. Look up the daily OID for the first accrual 

period in the calendar year during which 

the owner held the debt instrument.

2. Multiply the daily OID by the number of 

days the owner held the debt instrument 

during that accrual period.

3. Repeat steps (1) and (2) for any remaining 

accrual periods for the year during which 

the owner held the debt instrument.

4. Add the results in steps (2) and (3) to determine the owner's OID per $1,000 of stated redemption price at maturity.

5. If necessary, adjust the OID in step (4) to 

reflect the debt instrument's stated redemption price at maturity.

Report the result on Form 1099-OID in box 1.

Using the income tax regulations. Instead of using Section I to figure the OID, you 

can use the Regulations under sections 1272 

through 1275. 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. (If you use Section I-B, the OID is figured 

using 6-month accrual periods.)

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.

4 Publication 1212 (January 2024)
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. You must file an information return 

showing the reportable interest and OID, if any, 

on the CD. These rules apply whether or not 

you sold the CD to the owner. Report OID on a 

CD in the same way as OID on other debt instruments. See Short-Term Obligations Redeemed at Maturity and Long-Term Debt Instruments, earlier.

Bearer Bonds and Coupons

If a coupon from a bearer bond is presented to 

you for collection before the bond matures, you 

must generally report the interest on Form 

1099-INT. However, do not report the interest if 

either of the following applies.

• You hold the bond as a nominee for the 

true owner.

• The payee is a foreign person. See Backup 

Withholding, later.

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. The 

coupon may have been “stripped” (separated) 

from the bond and separately purchased.

However, if a long-term bearer bond in the 

OID tables 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.

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 24% (0.24). The 

backup withholding is deducted at the time a 

cash payment is made. See Pub. 1281 for more 

information.

Backup withholding generally applies to reportable interest and OID in the following situations.

1. The payee does not give you a taxpayer 

identification number (TIN). A payee who 

provides an obviously incorrect TIN, defined as a number that does not have 9 

digits, has not given you a TIN.

2. The IRS notifies you that the payee gave 

an incorrect TIN.

3. The IRS notifies you that the payee is subject to backup withholding due to payee 

underreporting.

4. For debt instruments acquired after 1983:

a. The payee does not certify, under 

penalties of perjury, that he or she is 

not subject to backup withholding under (3); or

b. The payee does not certify, under 

penalties of perjury, that the TIN given 

is correct.

However, an exception exists for certain window payments of interest. For short-term discount obligations (other than government obligations), bearer bonds and coupons, and U.S. 

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.

Short-term obligations. Backup withholding 

applies to the payment of OID that is includible 

in the holder’s gross income, to the extent it is in 

cash. However, backup withholding applies to 

any interest payable before maturity when the 

interest is paid or credited.

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. 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. If the 

purchase price of a listed obligation is not established or is disregarded, you must use the issue price shown in Section III.

Long-term obligations. If no cash payments 

are made on a long-term obligation before maturity, backup withholding applies only at maturity. The amount subject to backup withholding is 

the OID includible in the owner's gross income 

for the calendar year when the obligation matures. The amount to be withheld is limited to 

the cash paid.

Registered long-term obligations with 

cash payments. If a registered long-term obligation has cash payments before maturity, 

backup withholding applies when a cash payment is made. 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. 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. For 

any payment, the required withholding is limited 

to the cash paid.

Payee not the original owner. 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). 

The amount subject to backup withholding at 

maturity of a listed obligation must be determined using the issue price shown in Section I.

Bearer long-term obligations with cash 

payments. If a bearer long-term obligation has 

cash payments before maturity, backup withholding applies when the cash payments are 

made. 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. 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. The required withholding at maturity is limited to the cash paid.

Sales and redemptions. 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 24% (0.24) of the amount reported. 

Backup withholding applies in the following situations.

• The payee does not give you a TIN.

• The IRS notifies you that the payee gave 

an incorrect TIN.

• 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.

Payments outside the United States to U.S. 

person. The requirements for backup withholding generally apply to certain payments of 

OID and interest made outside the United 

States if you actually know the payee is a U.S. 

person. Otherwise, the requirements for backup 

withholding generally do not apply to payments 

of OID and interest made outside the United 

States or to payments made to a payee that you 

may treat as a foreign person (including by receipt of the appropriate Form W-8 or documentary evidence, when permitted). A U.S. resident 

or citizen is not a foreign person.

More information. For more information 

about backup withholding and exceptions to 

backup withholding, see Regulations section 

31.3406(g)-1 and Pub. 515. For information 

about information reporting on payments made 

outside the United States or to foreign persons, 

see Regulations sections 1.6049-5(c) through 

(e), Pub. 515, and the General Instructions for 

Certain Information Returns.

Information for Owners 

of OID Debt Instruments

This section is for persons who prepare their 

own tax returns. It discusses the income tax 

rules for figuring and reporting OID on long-term 

debt instruments. 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. However, the 

information provided does not cover every situation. More information can be found in Regulations under sections 1271 through 1275.

Including OID in income. Generally, you include OID in income as it accrues each year, 

whether or not you receive any payments from 

the debt instrument issuer.

Exceptions. The rules for including OID in 

income as it accrues generally do not apply to 

the following debt instruments.

• U.S. savings bonds.

• Tax-exempt obligations. (However, see 

Tax-Exempt Bonds and Coupons, later.)

• Loans of $10,000 or less between individuals who are not in the business of lending 

money. (The dollar limit includes 

Publication 1212 (January 2024) 5
outstanding prior loans by the lender to the 

borrower.) This exception does not apply if 

a principal purpose of the loan is to avoid 

any federal tax.

See chapter 1 of Pub. 550 for information 

about the rules for these and other types of discounted debt instruments, such as short-term 

and market discount obligations. Pub. 550 also 

discusses rules for holders of REMIC interests 

and CDOs.

De minimis rule. You can treat OID as zero if 

the total OID on a debt instrument is less than 

one-fourth of 1% (0.0025) of the stated redemption price at maturity multiplied by the number of 

full years from the date of original issue to maturity. Debt instruments with de minimis OID are 

not listed in this publication. 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. Also, the de minimis rules generally do not apply to tax-exempt 

obligations.

Example 2. 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. One-fourth of 1% (0.0025) of 

$1,000 (the stated redemption price) times 10 

(the number of full years from the date of original issue to maturity) equals $25. Under the de 

minimis rule, you can treat the OID as zero because the $20 discount is less than $25.

Example 3. Assume the same facts as Example 2, except the debt instrument was issued 

at $950. You must report part of the $50 OID 

each year because it is more than $25.

Choice to report all interest as OID. 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. See Constant yield 

method under Debt Instruments Issued After 

1984, later, for more information.

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. For more information, see Regulations 

section 1.1272-3.

Purchase after date of original issue. A debt 

instrument you purchased after the date of original issue may have premium, acquisition premium, or market discount. If your debt instrument has premium or acquisition premium, the 

OID reported to you on Form 1099-OID may 

have to be adjusted. For more information, see 

Showing an OID adjustment under How To Report OID, later. If your debt instrument is a covered security under Regulations section 

1.6045-1(a)(15), market discount, acquisition 

premium, or premium is reported in box 5, 6, or 

10 of Form 1099-OID, respectively. The following rules generally do not apply to contingent 

payment debt instruments.

Adjustment for premium. If your debt instrument (other than an inflation-indexed debt 

instrument) has premium, do not report any OID 

as ordinary income. Your adjustment is the total 

OID shown on your Form 1099-OID. If you pay a 

premium to buy a debt instrument, you may be 

able to amortize the premium over the remaining term of the debt instrument, which would allow you to reduce the amount of qualified stated 

interest reportable with respect to the debt instrument starting as of the date of purchase. For 

more information, see Bond Premium 

Amortization in Pub. 550.

Adjustment for acquisition premium. If 

your debt instrument has acquisition premium, 

reduce the OID you report. 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. If 

your debt instrument is a covered security under 

Regulations section 1.6045-1(a)(15), your 

broker may either report the acquisition premium amortization adjustment amount in box 6 

or may report a net amount of OID in box 1 or 

box 8, as applicable, that reflects the adjustment of OID by the amortized acquisition premium. In general, your broker will use the rules 

in Regulations section 1.1272-2(b)(4) to determine the amortization of acquisition premium.

Market discount. If your debt instrument 

has market discount that you choose to include 

in income currently and if the debt instrument is 

a covered security under Regulations section 

1.6045-1(a)(15), your broker will report the market discount includible in income in box 5 of 

Form 1099-OID if you notify your broker in writing that you elect to include market discount in 

income as it accrues. Unless you notify your 

broker in writing that you have not elected to 

use a constant yield method under section 

1276(b) to determine accruals of market discount, your broker will use a constant yield 

method to determine accruals of market discount rather than a ratable method.

See Market Discount Bonds in chapter 1 of 

Pub. 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.

If you choose to use the constant yield 

method to figure accrued market discount, also 

see Figuring OID on Long-Term Debt Instruments, later. The constant yield method of figuring accrued OID, explained under Debt Instruments Issued After July 1, 1982, and Before 

1985 or Debt Instruments Issued After 1984, as 

appropriate, is also used to figure accrued market discount.

For more information concerning premium or 

market discount on an inflation-indexed debt instrument, see Regulations section 1.1275-7.

Sale, exchange, or redemption. Generally, 

you treat your gain or loss from the sale, exchange, or redemption of an OID debt instrument as a capital gain or loss if you held the 

debt instrument as a capital asset. If you sold 

the debt instrument through a broker, you 

should receive Form 1099-B or an equivalent 

statement from the broker. Use the Form 

1099-B or other statement and your brokerage 

statements to complete Form 8949, and Schedule D (Form 1040).

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. Your basis, generally, is your cost increased by the OID you have included in income each year you held it. 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. For a covered security, your broker will report the adjusted basis of the debt instrument to you on Form 

1099-B.

See chapter 4 of Pub. 550 for more information about the tax treatment of the sale or redemption of discounted debt instruments.

Example 4. Larry, a calendar year taxpayer, 

bought a corporate debt instrument at original 

issue for $86,235.00 on November 1 of Year 1. 

The 15-year debt instrument matures on October 31 of Year 16 at a stated redemption price 

of $100,000. The debt instrument provides for 

semiannual payments of interest at 10% (0.10). 

Assume the debt instrument is a capital asset in 

Larry's hands. The debt instrument has 

$13,765.00 of OID ($100,000 stated redemption price at maturity minus $86,235.00 issue 

price).

Larry sold the debt instrument for $90,000 

on November 1 of Year 4. Including the OID he 

will report for the period he held the debt instrument in Year 4, Larry has included $1,214.00 of 

OID in income and has increased his basis by 

that amount to $87,449.00. Larry has realized a 

gain of $2,551.00. All of Larry's gain is capital 

gain.

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. Form 1099-OID shows all OID 

income in box 1 except OID on a U.S. Treasury 

obligation, which is shown in box 8. It also 

shows, in box 2, any qualified stated interest 

you must include in income. (However, any 

qualified stated interest on TIPS can be reported on Form 1099-INT in box 3.) For a taxable 

covered security, Form 1099-OID may show accrued market discount in box 5, acquisition premium in box 6, or premium in box 10. For a taxable covered security with acquisition premium, 

box 1 or box 8, as applicable, may show a net 

amount of OID that reflects the offset of OID by 

the amount of acquisition premium amortization 

for the year. If so, box 6 will be blank. For a covered security with bond premium, box 2 may 

show a net amount of qualified stated interest 

that reflects the offset of interest income by the 

amount of premium amortization for the year. If 

so, box 10 will be blank. A copy of Form 

1099-OID will be sent to the IRS. Do not attach 

your copy to your tax return. Keep it for your records.

6 Publication 1212 (January 2024)
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. A 20% (0.20) 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.

Tax-exempt obligations. For a tax-exempt 

OID obligation that is a covered security acquired on or after January 1, 2017, box 11 of 

Form 1099-OID shows the tax-exempt OID on 

the obligation for the part of the year you owned 

it. If there is an amount in both boxes 10 and 11, 

for a tax-exempt obligation that is a covered security acquired on or after January 1, 2017, and 

issued with OID, the amount in box 10 shows 

the amount of premium amortization for the year 

that reduces the amount of your tax-exempt interest for the year. The payer may, but is not required to, report the premium amortization for a 

tax-exempt obligation that is a covered security 

acquired before January 1, 2017, and issued 

with OID.

Form 1099-OID not received. 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.

Refiguring OID. You may need to refigure the 

OID shown in box 1 or box 8 of Form 1099-OID 

to determine the proper amount to include in income if one of the following applies.

• You bought the debt instrument at a premium or at an acquisition premium. However, if you bought a covered security at an 

acquisition premium, you may not have to 

refigure the OID if your broker reported a 

net adjusted amount of OID in box 1 or 

box 8, as applicable, that reflects the adjustment of the OID by the amortized acquisition premium.

• The debt instrument is a stripped bond or 

coupon (including zero coupon bonds 

backed by U.S. Treasury securities).

• The debt instrument is a contingent payment or inflation-indexed debt instrument.

See the discussions under Figuring OID on 

Long-Term Debt Instruments or Figuring OID on 

Stripped Bonds and Coupons, later, for the specific computations.

Refiguring interest. 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 Pub. 550 for information about refiguring the interest shown on Form 1099-OID in 

box 2.

Nominee. If you are the holder of an OID debt 

instrument and you receive a Form 1099-OID 

that shows your TIN and includes amounts belonging to another person, you are considered a 

“nominee.” You must file another Form 

1099-OID for each actual owner, showing the 

OID for the owner. Show the owner of the debt 

instrument as the “recipient” and you as the 

“payer.”

CAUTION

!

Complete Form 1099-OID and Form 1096 

and file the forms with the Internal Revenue 

Service Center for your area. See Where To File 

in the Instructions for Form 1096. You must also 

give a copy of the Form 1099-OID to the actual 

owner. However, you are not required to file a 

nominee return to show amounts belonging to 

your spouse. See the Form 1099-OID instructions for more information.

When preparing your tax return, follow the 

instructions under Showing an OID adjustment, 

later.

How To Report OID

You report your taxable interest and OID income 

on the interest line of Form 1040 or 1040-SR.

Where to report. 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 Schedule B (Form 

1040), line 1. Include all OID and qualified stated interest shown on any Form 1099-OID, 

boxes 1, 2, and 8, you received for the tax year. 

Also include any other OID and interest income 

for which you did not receive a Form 1099.

Showing an OID adjustment. To report more 

or less OID than shown in box 1 or box 8 on 

Form 1099-OID, list the full OID on Schedule B 

(Form 1040), Part I, line 1, and follow the instructions under (1) or (2) next.

1. If the OID, as adjusted, is less than the 

amount shown on Form 1099-OID, show 

the adjustment as follows.

a. Under your last entry on line 1, subtotal all interest and OID income listed 

on line 1.

b. Below the subtotal, write “Nominee 

Distribution” or “OID Adjustment” and 

show the OID you are not required to 

report.

c. Subtract that OID from the subtotal 

and enter the result on line 2.

2. If the OID, as adjusted, is more than the 

amount shown on Form 1099-OID, show 

the adjustment as follows.

a. Under your last entry on line 1, subtotal all interest and OID income listed 

on line 1.

b. Below the subtotal, write “OID Adjustment” and show the additional OID.

c. Add that OID to the subtotal and enter 

the result on line 2.

Note. The above does not apply to a debt 

instrument acquired at an acquisition premium if 

the broker reported a net amount of OID rather 

than a gross amount of OID in box 1 or box 8.

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. It 

may also depend on the type of the debt instrument. There are different rules for each of the 

following debt instruments.

1. Debt instruments issued after July 1, 

1982, and before 1985.

2. Debt instruments issued after 1984 (other 

than debt instruments described in Box 6 

under Form 1099-OID, earlier).

3. Contingent payment debt instruments issued after August 12, 1996.

4. Inflation-indexed debt instruments (including TIPS) issued after January 5, 1997.

Zero coupon bonds. The rules for figuring 

OID on zero coupon bonds, including those 

backed by U.S. Treasury securities, are discussed under Figuring OID on Stripped Bonds 

and Coupons, later.

Form 1099-OID. You should receive a Form 

1099-OID showing OID for the part of the year 

you held the debt instrument. However, if you 

paid an acquisition premium, you may need to 

refigure the OID to report on your tax return. 

See Reduction for acquisition premium, later. If 

your debt instrument is a covered security under 

Regulations section 1.6045-1(a)(15), you may 

not have to refigure the OID if your broker reported a net adjusted amount of OID in box 1 or 

box 8, as applicable, that reflects the adjustment of OID by the amortized acquisition premium.

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, later, and refer to Section I-A in 

the Original Issue Discount (OID) Tables, available at IRS.gov/Pub1212 by clicking the link under Recent Developments.

Form 1099-OID not received. The OID listed 

is for each $1,000 of redemption price. You 

must adjust the listed amount if your debt instrument has a different principal amount. For example, if you have a debt instrument with a 

$500 principal amount, use one-half the listed 

amount to figure your OID.

If you held the debt instrument the entire 

year, use the OID shown in Section I-A for a calendar year. (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.) If you did not hold the debt instrument the entire year, figure your OID using the 

following method.

1. Divide the OID shown by 12.

2. Multiply the result in (1) by the number of 

complete and partial months (for example, 

61/2 months) you held the debt instrument 

during a calendar year. This is the OID to 

include in income unless you paid an acquisition premium. The reduction for acquisition premium is discussed next.

Reduction for acquisition premium. If you 

bought the debt instrument at an acquisition 

premium, figure the OID to include in income as 

follows.

1. 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. This is the 

monthly OID.

Publication 1212 (January 2024) 7
2. Subtract from your cost the issue price 

and the accumulated OID from the date of 

issue to the date of purchase. (If the result 

is zero or less, stop here. You did not pay 

an acquisition premium.)

3. 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.

4. Subtract the amount figured in (3) from the 

amount figured in (1). This is the OID to include in income for each month you hold 

the debt instrument during the year.

Transfers during the month. 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 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. Your holding period for this 

purpose begins the day you acquire the debt instrument and ends the day before you dispose 

of it.

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. For 

information about showing the correct OID on 

your tax return, see How To Report OID, earlier.

Form 1099-OID. You should receive a Form 

1099-OID showing OID for the part of the year 

you held the debt instrument. However, if you 

paid an acquisition premium, you may need to 

refigure the OID to report on your tax return. 

See Constant yield method and the discussions 

on acquisition premium that follow, later.

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, later, and refer to Section I-A in 

the Original Issue Discount (OID) Tables, available at IRS.gov/Pub1212 by clicking the link under Recent Developments.

Form 1099-OID not received. The OID listed 

is for each $1,000 of redemption price. You 

must adjust the listed amount if your debt instrument has a different principal amount. For example, if you have a debt instrument with a 

$500 principal amount, use one-half the listed 

amount to figure your OID.

If you held the debt instrument the entire 

year, use the OID shown in Section I-A. (If your 

instrument is not listed in Section I-A, consult 

the issuer for information about the issue price, 

the YTM, and the OID that accrued for that 

year.) If you did not hold the debt instrument the 

entire year, figure your OID using either of the 

following methods.

Method 1. 

1. Divide the total OID for a calendar year by 

365 (366 for leap years).

2. Multiply the result in (1) by the number of 

days you held the debt instrument during 

that particular year.

This computation is an approximation and may 

result in a slightly higher OID than method 2.

Method 2. 

1. Look up the daily OID for the first accrual 

period you held the debt instrument during 

a calendar year. (See Accrual period under Debt Instruments Issued After July 1, 

1982, and Before 1985, later.)

2. Multiply the daily OID by the number of 

days you held the debt instrument during 

that accrual period.

3. If you held the debt instrument for part of 

both accrual periods, repeat (1) and (2) for 

the second accrual period.

4. Add the results of (2) and (3). This is the 

OID to include in income, unless you paid 

an acquisition premium. (The reduction for 

acquisition premium is discussed later.)

Constant yield method. This discussion 

shows how to figure OID on debt instruments issued after July 1, 1982, and before 1985, using 

a constant yield method. OID is allocated over 

the life of the debt instrument through adjustments to the issue price for each accrual period.

Figure the OID allocable to any accrual period as follows.

1. Multiply the adjusted issue price at the beginning of the accrual period by the debt 

instrument's YTM.

2. Subtract from the result in (1) any qualified 

stated interest allocable to the accrual period.

Accrual period. An accrual period for any 

OID debt instrument issued after July 1, 1982, 

and before 1985, is each 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. Your 

tax year will usually include parts of two accrual 

periods.

Daily OID. The OID for any accrual period 

is allocated equally to each day in the accrual 

period. You must include in income the sum of 

the OID amounts for each day you hold the debt 

instrument during the year. If your tax year includes parts of two or more accrual periods, you 

must include the proper daily OID amounts for 

each accrual period.

Figuring daily OID. The daily OID for the 

initial accrual period is figured using the following formula.

(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.

Reduction for acquisition premium on debt 

instruments purchased before July 19, 

1984. 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. 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.

Reduction for acquisition premium on debt 

instruments purchased after July 18, 1984. 

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. However, the 

method of figuring the daily acquisition premium 

is different from the method described in the 

preceding discussion. To figure the daily acquisition premium under this method, multiply 

the daily OID by the following fraction.

• The numerator is the acquisition premium.

• The denominator is the total OID remaining 

for the debt instrument after your purchase 

date.

Section I-A in the Original Issue Discount (OID) Tables is available at 

IRS.gov/Pub1212 by clicking the link 

under Recent Developments.

Using Section I-A to figure accumulated 

OID. 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.

1. The amount from the “Total OID to January 

1, YYYY” column for your debt instrument.

2. The OID from January 1 of a calendar year 

to the date of purchase, figured as follows.

a. 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.

b. 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.

c. Add the amounts figured in (2a) and 

(2b).

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. 

You must include the OID in gross income 

whether or not you hold the debt instrument as 

a capital asset. Your basis in the debt instrument is increased by the OID you include in 

8 Publication 1212 (January 2024)
income. For information about showing the correct OID on your tax return, see How To Report 

OID, earlier.

Form 1099-OID. You should receive a Form 

1099-OID showing OID for the part of a calendar year you held the debt instrument. However, 

if you paid an acquisition premium, you may 

need to refigure the OID to report on your tax return. See Constant yield method and Reduction 

for acquisition premium, later.

If your taxable debt instrument is a covered 

security, your broker will figure the amortization 

of acquisition premium for you. Your broker may 

report either a gross amount of OID in box 1 or 

box 8, as applicable, and the acquisition premium amortization in box 6, or may report a net 

amount of OID that reflects the offset of OID by 

the amount of acquisition premium amortization 

for the year in box 1 or box 8, as applicable. In 

general, your broker will use the rules in Regulations section 1.1272-2(b)(4) to determine the 

amortization of acquisition premium. However, 

you may use a constant yield method to amortize acquisition premium if you make an election 

under Regulations section 1.1272-3.

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. See Contingent 

Payment Debt Instruments or Inflation-Indexed 

Debt Instruments, later.

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, later, and refer to Section I-B in 

the Original Issue Discount (OID) Tables, available at IRS.gov/Pub1212 by clicking the link under Recent Developments.

Form 1099-OID not received. The OID listed 

is for each $1,000 of redemption price. You 

must adjust the listed amount if your debt instrument has a different principal amount. For example, if you have a debt instrument with a 

$500 principal amount, use one-half the listed 

amount to figure your OID.

Use the OID shown in Section I-B for a calendar year if you held the debt instrument the 

entire year. (If your debt instrument is not listed 

in Section I-B, consult the issuer for information 

about the issue price, the YTM, and the OID 

that accrued for that year.) If you did not hold 

the debt instrument the entire year, figure your 

OID as follows.

1. Look up the daily OID for the first accrual 

period in which you held the debt instrument during a calendar year. (See Accrual 

period under Debt Instruments Issued After 1984, later.)

2. Multiply the daily OID by the number of 

days you held the debt instrument during 

that accrual period.

3. Repeat (1) and (2) for any remaining accrual periods in which you held the debt instrument.

4. Add the results of (2) and (3). This is the 

OID to include in income for that year, unless you paid an acquisition premium. 

(The reduction for acquisition premium is 

discussed later.)

Tax-exempt bond. 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. You need 

to make this adjustment to determine if you 

have a gain or loss on a later disposition of the 

bond. In general, use the rules that follow to determine your OID. If your tax-exempt bond is a 

covered security under Regulations section 

1.6045-1(a)(15), your broker will make this adjustment to your basis and will report the adjusted basis on Form 1099-B.

Constant yield method. This discussion 

shows how to figure OID on debt instruments issued after 1984 using a constant yield method. 

(The special rules that apply to contingent payment debt instruments and inflation-indexed 

debt instruments are explained later.) OID is allocated over the life of the debt instrument 

through adjustments to the issue price for each 

accrual period.

Figure the OID allocable to any accrual period as follows.

1. Multiply the adjusted issue price at the beginning of the accrual period by a fraction. 

The numerator of the fraction is the debt 

instrument's YTM, and the denominator is 

the number of accrual periods per year. 

The yield must be stated appropriately taking into account the length of the particular 

accrual period.

2. Subtract from the result in (1) any qualified 

stated interest allocable to the accrual period.

Accrual period. 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. For example, a debt instrument maturing on March 31 has accrual periods that end on September 30 and March 31 

of each calendar year. Any short period is included as the first accrual period.

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. 

However, the OID listed for these debt instruments in Section I-B has been figured using 

6-month accrual periods.

Daily OID. The OID for any accrual period 

is allocated equally to each day in the accrual 

period. Figure the amount to include in income 

by adding the OID for each day you hold the 

debt instrument during the year. 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. 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.

Figuring daily OID. The daily OID for the 

initial accrual period is figured using the following formula.

ip x – qsi ( ) ( n ) ytm

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.

Example 5. On January 1 of Year 1, you 

bought a 15-year, 10% (0.10) debt instrument of 

A Corporation at original issue for $86,235.17. 

According to the prospectus, the debt instrument matures on December 31 of Year 15 at a 

stated redemption price of $100,000. The YTM 

is 12% (0.12), compounded semiannually. The 

debt instrument provides for qualified stated interest payments of $5,000 on June 30 and December 31 of each calendar year. The accrual 

periods are the 6-month periods ending on 

each of these dates. The number of days for the 

first accrual period (January 1 through June 30) 

is 181 days (182 for leap years). The daily OID 

for the first accrual period is figured as follows.

($86,235.17 x 0.12/2) – $5,000

181 days

=

$174.11020 

 = $0.96193 181

The adjusted issue price at the beginning of 

the second accrual period is the issue price 

plus the OID previously includible in income 

($86,235.17 + $174.11), or $86,409.28. The 

number of days for the second accrual period 

(July 1 through December 31) is 184 days. The 

daily OID for the second accrual period is figured as follows.

($86,409.28 x 0.12/2) – $5,000

184 days

=

$184.55681

= $1.00303 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, $174.11 ($0.96193 × 181 

days) plus $184.56 ($1.00303 × 184 days), or 

$358.67. Add the OID to the $10,000 interest 

you report on your income tax return for Year 1.

Example 6. 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. Also, 

the interest payment dates are October 31 and 

Publication 1212 (January 2024) 9
April 30 of each calendar year. The accrual periods are the 6-month periods ending on each of 

these dates.

The number of days for the first accrual period (May 1 through October 31) is 184 days. 

The daily OID for the first accrual period is figured as follows.

($86,235.17 x 0.12/2) – $5,000

184 days

=

$174.11020

= $0.94625 184

The number of days for the second accrual 

period (November 1 through April 30) is 181 

days (182 for leap years). The daily OID for the 

second accrual period is figured as follows.

($86,409.28 x 0.12/2) – $5,000

181 days

=

$184.55681

= $1.01965 181

If you hold the debt instrument through the 

end of Year 1, you must include $236.31 of OID 

in income. This is $174.11 ($0.94625 × 184 

days) for the period May 1 through October 31 

plus $62.20 ($1.01965 × 61 days) for the period 

November 1 through December 31. The OID is 

added to the $5,000 interest income paid on 

October 31 of Year 1. Your basis in the debt instrument is increased by the OID you include in 

income. On January 1 of Year 2, your basis in 

the A Corporation debt instrument is 

$86,471.48 ($86,235.17 + $236.31).

Short first accrual period. You may have 

to make adjustments if a debt instrument has a 

short first accrual period. 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. (The remaining accrual periods begin 

on May 1 and November 1.) For this short period, figure the daily OID as described earlier, 

but adjust the yield for the length of the short 

accrual period. You may use any reasonable 

compounding method in determining OID for a 

short period. Examples of reasonable compounding methods include continuous compounding and monthly compounding (that is, 

simple interest within a month). Consult your tax 

advisor for more information about making this 

computation.

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.

Reduction for acquisition premium. If you 

acquired a debt instrument with OID at an acquisition premium, you must amortize the acquisition premium over the life of the debt instrument. Unless you make the constant yield 

election under Regulations section 1.1272-3, 

figure the OID includible in income by reducing 

the daily OID by the daily acquisition premium. 

To figure the daily acquisition premium, multiply 

the daily OID by the following fraction.

• The numerator is the acquisition premium.

• The denominator is the total OID remaining 

for the debt instrument after your purchase 

date.

If your debt instrument is a covered security, 

your broker may either report a gross amount of 

OID in box 1 or box 8 and the amount of acquisition premium amortization in box 6, or your 

broker may report a net OID amount to you in 

box 1 or box 8, and leave box 6 blank.

If your broker reports a net OID amount in 

box 1 or box 8, do not deduct acquisition premium amortization from that amount. If your 

broker reports a gross amount of OID in box 1 

or box 8, and the amount of acquisition premium amortization in box 6, follow steps 1.a 

through 1.c under Showing an OID adjustment, 

earlier.

Example 7. 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. The 

adjusted issue price on November 1 of Year 1 is 

$86,409.28 ($86,235.17 + $174.11). In this 

case, you paid an acquisition premium of 

$590.72 ($87,000 − $86,409.28). The daily OID 

for the accrual period November 1 through April 

30, reduced for the acquisition premium, is figured as follows.

1) Daily OID on date of purchase 

(2nd accrual period) .......... $1.01965*

2) Acquisition 

premium .......... $590.72

3) Total OID remaining 

after purchase date 

($13,764.83 − 

$174.11) ......... $13,590.72

4) Line 2 ÷ line 3 ............... 0.04346

5) Line 1 × line 4 ............... 0.04432

6) Daily OID reduced for the 

acquisition premium. Line 1 

− line 5 ............... $0.97533

* As shown in Example 6, earlier.

The total OID to include in income for Year 1 

is $59.50 ($0.97533 × 61 days).

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. In general, a contingent payment debt instrument provides for one 

or more payments that are contingent as to timing or amount. If you hold a contingent payment 

debt instrument, you must report OID as it accrues each year.

Contingent payment debt instruments acquired on or after January 1, 2016, are “covered 

securities.” Dispositions of covered and noncovered securities must be reported on Form 8949. 

The gain or loss on these securities subject to 

the noncontingent bond method will be adjusted by any amounts shown in column (g) with a 

corresponding code O in column (f). In general, 

the gain from the sale of these securities will be 

ordinary and losses will be ordinary to the extent of prior-year OID inclusions.

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. To figure OID accruals on contingent payment debt instruments, 

holders and issuers must use the noncontingent 

bond method.

Noncontingent bond method. Under this 

method, the issuer must figure 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. In 

general, holders and issuers accrue OID on this 

projected payment schedule using the constant 

yield method that applies to fixed payment debt 

instruments. When the actual amount of a contingent payment differs from the projected fixed 

amount, the holders and issuers make adjustments to their OID accruals. If the actual contingent payment is larger than expected, both the 

issuer and the holder increase their OID accruals. If the actual contingent payment is 

smaller than expected, holders and issuers 

generally decrease their OID accruals.

Form 1099-OID. 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. For example, the 

amount may not be correct if the actual amount 

of the contingent payment was different from 

the projected amount. If the amount in box 1 is 

not correct, you must figure the OID to report on 

your return under the following rules. For information on showing an OID adjustment on your 

tax return, see How To Report OID, earlier.

Figuring OID. To figure OID on a contingent 

payment debt instrument, you need to know the 

“comparable yield” and “projected payment 

schedule” of the debt instrument. The issuer 

must make these available to you. If the issuer 

does not determine the comparable yield and/or 

the projected payment schedule, the holder 

must do so instead.

Comparable yield. The comparable yield 

is generally 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. The comparable yield 

is determined as of the debt instrument's issue 

date.

Projected payment schedule. 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. The projected payment schedule is created by the issuer as of the debt instrument's issue date. It is 

used to determine the issuer's and holder's interest accruals and adjustments. If the issuer 

does not determine the projected payment 

schedule, the holder must do so instead.

10 Publication 1212 (January 2024)
Steps for figuring OID. Figure the OID on 

a contingent payment debt instrument in two 

steps.

1. Figure the OID using the Constant yield 

method (discussed earlier under Debt Instruments Issued After 1984) that applies 

to fixed payment debt instruments. Use 

the comparable yield as the YTM. 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). Do 

not treat any amount payable as qualified 

stated interest.

2. Adjust the OID in (1) to account for the actual contingent payments. If the actual 

amount of the contingent payment is 

greater than the projected fixed amount, 

you have a positive adjustment. If the contingent payment is less than the projected 

fixed amount, you have a negative adjustment.

Net positive adjustment. 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. Treat a 

net positive adjustment as additional OID for the 

tax year.

Net negative adjustment. 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. Use a 

net negative adjustment to offset OID on the 

debt instrument for the tax year. 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. 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. You must 

carry forward any net negative adjustment that 

is more than the total OID for the tax year and 

treat it as a negative adjustment in the next tax 

year.

Basis adjustments. In general, increase your 

basis in a contingent payment debt instrument 

by the OID included in income. Your basis, however, is not affected by any negative or positive 

adjustments. Decrease your basis by any noncontingent payment received and the projected 

contingent payment scheduled to be received.

Treatment of gain or loss on sale or exchange. 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. 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. If the 

debt instrument is a capital asset, treat any loss 

that is more than your prior OID accruals as a 

capital loss.

See Regulations section 1.1275-4(b) for exceptions to these rules.

Premium, acquisition premium, and market 

discount. The rules for accruing premium, acquisition premium, and market discount do not 

apply to a contingent payment debt instrument. 

See Regulations section 1.1275-4(b) to determine how to account for these items.

Inflation-Indexed Debt Instruments

This discussion shows how you figure OID on 

certain inflation-indexed debt instruments issued after January 5, 1997. An inflation-indexed 

debt instrument is generally a debt instrument 

on which the payments are adjusted for inflation 

and deflation (such as TIPS).

In general, if you hold an inflation-indexed 

debt instrument, you must report as OID any increase in the inflation-adjusted principal amount 

of the debt instrument that occurs while you 

held the debt instrument during the tax year. 

You must include the OID in gross income 

whether or not you hold the debt instrument as 

a capital asset. Your basis in the debt instrument is increased by the OID you include in income.

Inflation-indexed debt instruments acquired 

on or after January 1, 2016, are “covered securities.” Dispositions of covered and noncovered 

securities must be reported on Form 8949.

Inflation-adjusted principal amount. For any 

date, the inflation-adjusted principal amount of 

an inflation-indexed debt instrument is the debt 

instrument's outstanding principal amount multiplied by the index ratio for that date. (For TIPS, 

multiply the par value by the index ratio for that 

date.) For this purpose, determine the outstanding principal amount as if there were no inflation 

or deflation over the term of the debt instrument.

Index ratio. This is a fraction, the numerator of which is the value of the reference index 

for the date and the denominator of which is the 

value of the reference index for the debt instrument's issue date.

A reference index measures inflation and 

deflation over the term of a debt instrument. Its 

value is reset each month to a current value of a 

single qualified inflation index (for example, the 

non-seasonally adjusted U.S. City Average All 

Items Consumer Price Index for All Urban Consumers (CPI-U), published by the Department 

of Labor). The value of the index for any date 

between reset dates is determined through 

straight-line interpolation.

The daily index ratios for TIPS are 

available on the Internet at 

TreasuryDirect.gov/instit/annceresult/

tipscpi/tipscpi.htm.

Form 1099-OID. The amount shown in box 8 

of the Form 1099-OID you receive for an inflation-indexed debt instrument may not be the 

correct amount to include in income. For example, the amount may not be correct if you 

bought the debt instrument other than at original 

issue or sold it during the year. If the amount 

shown in box 8 is not correct, you must figure 

the OID to report on your return under the following rules. For information about showing an 

OID adjustment on your tax return, see How To 

Report OID, earlier.

Figuring OID. Figure the OID on an inflation-indexed debt instrument using one of the 

following methods.

• The coupon bond method, described in 

the following discussion, applies if the debt 

instrument is issued at par (as determined 

under Regulations section 1.1275-7(d)(2)

(i)), all stated interest payable on the debt 

instrument is qualified stated interest, and 

the coupons have not been stripped from 

the debt instrument. This method applies 

to TIPS, including TIPS issued with more 

than a de minimis amount of premium (see 

Regulations section 1.1275-7).

• The discount bond method applies to 

any inflation-indexed debt instrument that 

does not qualify for the coupon bond 

method, such as a stripped debt instrument. This method is described in Regulations section 1.1275-7(e).

Under the coupon bond method, figure the 

OID you must report for the tax year as follows.

Debt instrument held at the end of the 

tax year. If you held the debt instrument at the 

end of the tax year, figure your OID for the year 

using the following steps.

1. Add the inflation-adjusted principal 

amount for the day after the last day of the 

tax year and any principal payments you 

received during the year. (For TIPS, multiply the par value by the index ratio for the 

day after the last day of the tax year, and 

add any principal payments received.)

2. Subtract from (1) above the inflation-adjusted principal amount for the first day on 

which you held the debt instrument during 

the tax year. (For TIPS, subtract from (1) 

above the product of the par value times 

the index ratio for the first day held during 

the tax year.)

Interest is reported separately, as discussed 

later under Stated interest, later.

Debt instrument sold or retired during 

the tax year. If you sold the debt instrument 

during the tax year, or if it was retired, figure 

your OID for the year using the following steps.

1. Add the inflation-adjusted principal 

amount for the last day on which you held 

the debt instrument during the tax year 

and any principal payments you received 

during the year. (For TIPS, multiply the par 

value by the index ratio for the sale or retirement date, and add any principal payments received.)

2. Subtract from (1) above the inflation-adjusted principal amount for the first day on 

which you held the debt instrument during 

the tax year. (For TIPS, subtract from (1) 

above the product of the par value times 

the index ratio for the first day held during 

the tax year.)

Interest is reported separately, as discussed 

later under Stated interest, later

Example 8. On February 6 of Year 9, you 

bought an old 10-year, 3.375% (0.03375) inflation-indexed debt instrument (maturing January 

15 of Year 11) for $9,831. The stated principal 

(par value) amount is $10,000 and the 

Publication 1212 (January 2024) 11
inflation-adjusted principal amount for February 

6 of Year 9 is $12,047.50 ($10,000 par value 

times 1.20475 index ratio). You held the debt instrument until August 29 of Year 9 when the inflation-adjusted principal amount was 

$12,275.70 ($10,000 par value times 1.22757 

index ratio). Your OID for Year 9 is $228.20 

($12,275.70 − $12,047.50). Your basis in the 

debt instrument on August 29 of Year 9 was 

$10,059.20 ($9,831 cost + $228.20 OID) for 

Year 9.

Stated interest. Under the coupon bond 

method, you report any stated interest on the 

debt instrument under your regular method of 

accounting. For example, if you use the cash 

method, you generally include in income for the 

tax year any interest payments received on the 

debt instrument during the year.

Deflation adjustments. If your calculation to 

figure OID on an inflation-indexed debt instrument produces a negative number, you do not 

have any OID. Instead, you have a deflation adjustment. A deflation adjustment is generally 

used to offset interest income from the debt instrument for the tax year. Show this offset as an 

adjustment on your Schedule B (Form 1040) in 

the same way you would show an OID adjustment. See How To Report OID, earlier.

You decrease your basis in the debt instrument by the deflation adjustment used to offset 

interest income.

Example 9. Assume the same facts as in 

Example 8, except that you bought the debt instrument for $9,831 on January 6 of Year 9, 

when the inflation-adjusted principal amount 

was $12,050.10, and sold the debt instrument 

on March 1 of Year 9, when the inflation-adjusted principal amount was $12,011.20. Because 

the OID calculation for Year 9 ($12,011.20 − 

$12,050.10) produces a negative number (negative $38.90), you have a deflation adjustment. 

You use this deflation adjustment to offset the 

stated interest reported to you on the debt instrument.

Your basis in the debt instrument on March 1 

of Year 9 is $9,792.10 ($9,831 cost − $38.90 

deflation adjustment).

Premium on inflation-indexed debt instruments. In general, any premium on an inflation-indexed debt instrument is determined as 

of the date you acquire the debt instrument by 

assuming there will be no further inflation or deflation over the remaining term of the debt instrument. You allocate any premium over the remaining term of the debt instrument by making 

the same assumption. In general, the premium 

allocable to a tax year offsets the interest otherwise includible in income for the year. If the premium allocable to the year is more than that interest, the difference generally offsets the OID 

on the debt instrument for the year. See Regulations section 1.1275-7 for an example applying 

the coupon bond method to a TIPS issued with 

more than a de minimis amount of premium.

Figuring OID on Stripped 

Bonds and Coupons

If you strip one or more coupons from a bond 

and then sell or otherwise dispose of the bond 

or the stripped coupons, they are treated as 

separate debt instruments issued with OID. The 

holder of a stripped bond has the right to receive the principal (redemption price) payment. 

The holder of a stripped coupon has the right to 

receive an interest payment on the bond. The 

rule requiring the holder of a debt instrument issued with OID to include the OID in gross income as it accrues applies to stripped bonds 

and coupons acquired after July 1, 1982. See 

Debt Instruments and Coupons Purchased After July 1, 1982, and Before 1985 or Debt Instruments and Coupons Purchased After 1984, 

later, for information about figuring the OID to 

report.

Stripped bonds and coupons include the following instruments.

• Zero coupon bonds available through the 

Department of the Treasury's STRIPS program and government-sponsored enterprises such as the Resolution Funding Corporation and the Financing Corporation.

• Debt instruments backed by U.S. Treasury 

securities that represent ownership interests in those securities. Examples include 

obligations backed by U.S. Treasury bonds 

that are offered primarily by brokerage 

firms (variously called CATS, TIGRs, etc.).

Seller of stripped bonds or coupons. If you 

strip coupons from a bond and sell the bond or 

coupons, include in income the interest that accrued while you held the bond before the date 

of sale to the extent the interest was not previously included in your income. For an obligation 

acquired after October 22, 1986, you must also 

include the market discount that accrued before 

the date of sale of the stripped bond (or coupon) to the extent the discount was not previously included in your income.

Add the interest and market discount you include in income to the basis of the bond and 

coupons. This adjusted basis is then allocated 

between the items you keep and the items you 

sell, based on the fair market value of the items. 

The difference between the sale price of the 

bond (or coupon) and the allocated basis of the 

bond (or coupon) is the gain or loss from the 

sale.

Treat any item you keep as an OID bond 

originally issued and purchased by you on the 

sale date of the other items. If you keep the 

bond, treat the excess of the redemption price 

of the bond over the basis of the bond as OID. If 

you keep the coupons, treat the excess of the 

amount payable on the coupons over the basis 

of the coupons as OID.

Purchaser of stripped bonds or coupons. If 

you purchase a stripped bond or coupon, treat it 

as if it were originally issued on the date of purchase. If you purchase the stripped bond, treat 

as OID any excess of the stated redemption 

price at maturity over your purchase price. If you 

purchase the stripped coupon, treat as OID any 

excess of the amount payable on the due date 

of the coupon over your purchase price.

Form 1099-OID

The amount shown in box 8 of the Form 

1099-OID you receive for a stripped bond or 

coupon may not be the proper amount to include in income. If not, you must figure the OID 

to report on your return under the rules that follow. For information about showing an OID adjustment on your tax return, see How To Report 

OID, earlier.

Tax-Exempt Bonds and Coupons

The OID on a stripped tax-exempt bond, or on a 

stripped coupon from such a bond, is generally 

not taxable. However, if you acquired the stripped bond or coupon after October 22, 1986, 

you must accrue OID on it to determine its basis 

when you dispose of it. How you figure accrued 

OID and whether any OID is taxable depend on 

the date you bought (or are treated as having 

bought) the stripped bond or coupon.

Acquired before June 11, 1987. None of the 

OID on bonds or coupons acquired before this 

date is taxable. The accrued OID is added to 

the basis of the bond or coupon. The accrued 

OID is the amount that produces a YTM, based 

on your purchase date and purchase price, 

equal to the lower of the following rates.

1. The coupon rate on the bond before the 

separation of coupons. (However, if you 

can establish the YTM of the bond (with all 

coupons attached) at the time of its original issue, you can use that YTM instead.)

2. The YTM of the stripped bond or coupon.

Increase your basis in the stripped tax-exempt bond or coupon by the interest that accrued but was neither paid nor previously reflected in your basis before the date you sold the 

bond or coupon.

Acquired after June 10, 1987. Part of the OID 

on bonds or coupons acquired after this date 

may be taxable. Figure the taxable part in three 

steps.

Step 1. Figure OID as if all taxable. First, 

figure the OID following the rules in this section 

as if all the OID were taxable. (See Debt Instruments and Coupons Purchased After 1984, 

later.) Use the YTM based on the date you obtained the stripped bond or coupon.

Step 2. Determine nontaxable part. Find 

the issue price that would produce a YTM as of 

the purchase date equal to the lower of the following rates.

1. The coupon rate on the bond from which 

the coupons were separated. (However, 

you can use the original YTM instead.)

2. The YTM based on the purchase date and 

purchase price of the stripped coupon or 

bond.

Subtract this issue price from the stated redemption price of the bond at maturity (or, in the 

case of a coupon, the amount payable on the 

due date of the coupon). The result is the part of 

the OID treated as nontaxable OID on a stripped tax-exempt bond or coupon.

12 Publication 1212 (January 2024)
Step 3. Determine taxable part. The taxable part of OID is the OID determined in Step 1 

minus the nontaxable part determined in Step 

2.

Exception. None of the OID on your stripped tax-exempt bond or coupon is taxable if you 

bought it from a person who held it for sale on 

June 10, 1987, in the ordinary course of that 

person's trade or business.

Basis adjustment. Increase the basis of 

your stripped tax-exempt bond or coupon by the 

taxable and nontaxable accrued OID. If you own 

a tax-exempt bond from which one or more coupons have been stripped, increase your basis in 

it by the sum of the interest accrued but not paid 

before you dispose of it (and not previously reflected in basis) and any accrued market discount to the extent not previously included in 

your income.

Example 10. Assume that a tax-exempt 

bond with a face amount of $100 due January 1 

of Year 4 and a coupon rate of 10% (0.10) 

(compounded semiannually) was issued for 

$100 on January 1 of Year 1. On January 1 of 

Year 2, the bond was stripped and you bought 

the right to receive the principal amount for 

$79.21. The stripped bond is treated as if it was 

originally issued on January 1 of Year 2 with 

OID of $20.79 ($100.00 − $79.21). This reflects 

a YTM at the time of the strip of 12% (0.12) 

(compounded semiannually). The tax-exempt 

part of OID on the stripped bond is limited to 

$17.73. This is the difference between the redemption price ($100) and the issue price that 

would produce a YTM of 10% (0.10) ($82.27). 

This part of the OID is treated as OID on a 

tax-exempt obligation.

The OID on the stripped bond that is more 

than the tax-exempt part is $3.06. This is the excess of the total OID ($20.79) over the tax-exempt part ($17.73). This part of the OID ($3.06) 

is treated as OID on an obligation that is not 

tax-exempt.

The total OID allocable to the accrual period 

ending June 30 of Year 2 is $4.75 (6% (0.06) × 

$79.21). Of this, $4.11 (5% (0.05) × $82.27) is 

treated as OID on a tax-exempt obligation and 

$0.64 ($4.75 − $4.11) is treated as OID on an 

obligation that is not tax-exempt. Your basis in 

the debt instrument as of June 30 of Year 2 is increased to $83.96 ($79.21 purchase price + accrued OID of $4.75).

Debt Instruments and Coupons 

Purchased After July 1, 1982, and 

Before 1985

If you purchased a stripped bond or coupon after July 1, 1982, and before 1985, and you held 

that debt instrument as a capital asset during 

any part of a calendar year, you must figure the 

OID to be included in income using a constant 

yield method. Under this method, OID is allocated over the time you hold the debt instrument 

by adjusting the acquisition price for each accrual period. The OID for the accrual period is 

figured by multiplying the adjusted acquisition 

price at the beginning of the period by the YTM.

Adjusted acquisition price. The adjusted acquisition price of a stripped bond or coupon at 

the beginning of the first accrual period is its 

purchase (or acquisition) price. The adjusted 

acquisition price at the beginning of any subsequent accrual period is the sum of the acquisition price and all of the OID includible in income 

before that accrual period.

Accrual period. An accrual period for any 

stripped bond or coupon acquired before 1985 

is each year period beginning on the date of the 

purchase of the obligation and each anniversary thereafter, or the shorter period to maturity 

for the last accrual period.

Yield to maturity (YTM). In general, the YTM 

of a stripped bond or coupon is the discount 

rate that, when used in figuring the present 

value of all principal and interest payments, produces an amount equal to the acquisition price 

of the debt instrument or coupon.

Figuring YTM. If you purchased a stripped 

bond or coupon after July 1, 1982, but before 

1985, and the period from your purchase date 

to the day the debt instrument matures can be 

divided exactly into full 1-year periods without 

including a shorter period, then the YTM can be 

figured by applying the following formula.

( ( ap ) ) srp – 1

1

m

srp = stated redemption price at maturity

ap = acquisition price

m = number of full accrual periods from 

purchase to maturity

If the debt instrument is a stripped coupon, 

the stated redemption price is the amount payable on the due date of the coupon.

If the period between your purchase date 

and the maturity date (or due date) of the debt 

instrument does not divide into an exact number 

of full 1-year periods, so that a period shorter 

than 1 year must be included, consult your 

broker or your tax advisor for information about 

figuring the YTM.

Daily OID. The OID for any accrual period is allocated equally to each day in the accrual period. You figure the amount to include in income 

by adding the daily OID amounts for each day 

you hold the debt instrument during the year. If 

your tax year includes parts of more than one 

accrual period (which will be the case unless 

the accrual period coincides with your tax year), 

you must include the proper daily OID amounts 

for each of the two accrual periods.

The daily OID for the initial accrual period is 

figured by applying the following formula.

(ap × ytm)

p

ap = acquisition price

ytm = yield to maturity

p = number of days in accrual period

The daily OID for subsequent accrual periods is figured in the same way, except the adjusted acquisition price at the beginning of each 

period is used in the formula instead of the acquisition price.

The rules for figuring OID on these debt instruments are similar to those in Debt Instruments Issued After July 1, 1982, and Before 

1985, earlier.

Debt Instruments and Coupons 

Purchased After 1984

If you purchased a stripped bond or coupon 

(other than a stripped inflation-indexed debt instrument) after 1984, and you held that debt instrument during any part of a calendar year, you 

must figure the OID to be included in income 

using a constant yield method. Under this 

method, OID is allocated over the time you hold 

the debt instrument by adjusting the acquisition 

price for each accrual period. The OID for the 

accrual period is figured by multiplying the adjusted acquisition price at the beginning of the 

period by a fraction. The numerator of the fraction is the debt instrument's YTM, and the denominator is the number of accrual periods per 

year.

If the stripped bond or coupon is an inflation-indexed instrument, you must figure the 

OID to be included in income using the discount 

bond method described in Regulations section 

1.1275-7(e).

Adjusted acquisition price. The adjusted acquisition price of a stripped bond or coupon at 

the beginning of the first accrual period is its 

purchase (or acquisition) price. The adjusted 

acquisition price at the beginning of any subsequent accrual period is the sum of the acquisition price and all of the OID includible in income 

before that accrual period.

Accrual period. For a stripped bond or coupon acquired 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 stripped bond (or 

payment date of a stripped coupon) or the date 

6 months before that date. For example, a stripped bond that has a maturity date (or a stripped 

coupon that has a payment date) of March 31 

has accrual periods that end on September 30 

and March 31 of each calendar year. Any short 

period is included as the first accrual period.

For a stripped bond or coupon acquired 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.

Yield to maturity (YTM). In general, the YTM 

of a stripped bond or coupon is the discount 

rate that, when used in figuring the present 

value of all principal and interest payments, produces an amount equal to the acquisition price.

Figuring YTM. How you figure the YTM for 

a stripped debt instrument or coupon purchased after 1984 depends on whether you 

Publication 1212 (January 2024) 13
have equal accrual periods or a short initial accrual period.

1. Equal accrual periods. If the period 

from the date you purchased a stripped bond or 

coupon to the maturity date can be divided 

evenly into full accrual periods without including 

a shorter period, you can figure the YTM by using the following formula.

1

srp m

( ) ap ( – 1 ) n ×

n = number of accrual periods in 1 year

srp = stated redemption price at maturity

ap = acquisition price

m = number of full accrual periods from 

purchase to maturity

If the debt instrument is a stripped coupon, 

the stated redemption price is the amount payable on the due date of the coupon.

Example 11. On May 15 of Year 1, you 

bought a coupon stripped from a U.S. Treasury 

bond through the Department of the Treasury's 

STRIPS program for $38,000. An amount of 

$100,000 is payable on the coupon's due date, 

November 14 of Year 13. There are exactly 25 

6-month periods between the purchase date, 

May 15 of Year 1, and the coupon's due date, 

November 14 of Year 13. The YTM on this stripped coupon is figured as follows.

$100,000 (( ) $38,000 ) 2 ×

= 2 × (1.03946 -1) = 0.07892 = 7.892%

1

25

– 1

Use 7.892% (0.07892) YTM to figure the 

OID for each accrual period or partial accrual 

period for which you must report OID.

2. Short initial accrual period. If the period from the date you purchased a stripped 

bond or coupon to the date of its maturity cannot be divided evenly into accrual periods, so 

that a shorter period must be included, you can 

figure the YTM by using the following formula 

(the exact method).

srp ( ) ap n × ( – 1 )

1

r + m s ( )

n = number of accrual periods in 1 year

srp = stated redemption price at maturity

ap = acquisition price

r = number of days from purchase to end of 

short accrual period

s = number of days in accrual period ending on 

last day of short accrual period

m = number of full accrual periods from 

purchase to maturity

Example 12. On May 30 of Year 1, you 

bought a coupon stripped from a U.S. Treasury 

bond through the Department of the Treasury's 

STRIPS program for $60,000. $100,000 is 

payable on the coupon's due date, August 11 of 

Year 7. You decide to figure OID using 6-month 

accrual periods. There are 12 full 6-month accrual periods and a 74-day short initial accrual 

period from the purchase date to the coupon's 

due date. The YTM on this stripped coupon is 

figured as follows.

(( ) ) ( ) ( ) $60,000

$100,000 2 x – 1

1

+ 12 74

181 = 2 x (1.04203 – 1) = 0.08406 = 8.406%

Use 8.406% (0.08406) YTM to figure the 

OID for each accrual period or partial accrual 

period for which you must report OID.

Daily OID. The OID for any accrual period is allocated equally to each day in the accrual period. You must include in income the sum of the 

daily OID amounts for each day you hold the 

debt instrument during the year. Since your tax 

year will usually include parts of two or more accrual periods, you must include the proper daily 

OID amounts for each accrual period.

Figuring daily OID. For the initial accrual 

period of a stripped bond or coupon acquired 

after 1984, figure the daily OID using Formula 1, 

later, if there are equal accrual periods. Use 

Formula 2, later, if there is a short initial accrual 

period.

For subsequent accrual periods, figure the 

daily OID using Formula 1 (whether or not there 

was a short initial accrual period), but use the 

adjusted acquisition price in the formula instead 

of the acquisition price.

Formula 1. 

ap × ytm/n

p

Formula 2. 

ap x 1 + – ap ( ) ( )

( ) n

ytm

r

s

r

ap = acquisition price

ytm = yield to maturity

n = number of accrual periods in 1 year

p = number of days in accrual period

r = number of days from purchase to end of 

short accrual period

s = number of days in accrual period ending on 

last day of short accrual period

The rules for figuring OID on these debt instruments are similar to those illustrated in Example 5 and Example 6, earlier, under Debt Instruments Issued After 1984.

Example 13. Assume the same facts as in 

Example 12 and that you held the coupon for 

the rest of Year 1.

For the short initial accrual period from May 

30 through August 11, the daily OID is figured 

using Formula 2, as follows.

( ) $60,000 x 1 + – $60,000

( )

( ) 2

0.08406

74

181

74

= = $13.76327 74

$1,018.48

The OID for this period is $1,018.48 

($13.76327 × 74 days).

For the second accrual period from August 

12 of Year 1 through February 11 of Year 2, the 

adjusted acquisition price is $61,018.48. This is 

the original $60,000 acquisition price plus 

$1,018.48 OID for the short initial accrual period. The daily OID is figured using Formula 1, 

as follows.

$61,018.48 × (0.08406/2)

184

=

$2,564.60671

= $13.93808 184

The OID for the part of this period included 

in Year 1 (August 12–December 31) is 

$1,979.21 ($13.93808 × 142 days).

The OID to be reported on your income tax 

return for Year 1 is $2,997.69 ($1,018.48 + 

$1,979.21).

Final accrual period. The OID for the final 

accrual period for a stripped bond or coupon is 

the amount payable at maturity of the stripped 

bond (or interest payable on the stripped coupon) minus the adjusted acquisition price at the 

beginning of the final accrual period. The daily 

OID for the final accrual period is figured by dividing the OID for the period by the number of 

days in the period.

How To Get Tax Help

If you have questions about a tax issue; need 

help preparing your tax return; or want to download free publications, forms, or instructions, go 

to IRS.gov to find resources that can help you 

right away.

Preparing and filing your tax return. After 

receiving all your wage and earnings statements (Forms W-2, W-2G, 1099-R, 1099-MISC, 

1099-NEC, etc.); unemployment compensation 

statements (by mail or in a digital format) or 

other government payment statements (Form 

1099-G); and interest, dividend, and retirement 

statements from banks and investment firms 

(Forms 1099), you have several options to 

choose from to prepare and file your tax return. 

You can prepare the tax return yourself, see if 

you qualify for free tax preparation, or hire a tax 

professional to prepare your return.

14 Publication 1212 (January 2024)
Free options for tax preparation. Your options for preparing and filing your return online 

or in your local community, if you qualify, include 

the following.

• Free File. This program lets you prepare 

and file your federal individual income tax 

return for free using software or Free File 

Fillable Forms. However, state tax preparation may not be available through Free File. 

Go to IRS.gov/FreeFile to see if you qualify 

for free online federal tax preparation, e-filing, and direct deposit or payment options.

• VITA. The Volunteer Income Tax Assistance (VITA) program offers free tax help to 

people with low-to-moderate incomes, persons with disabilities, and limited-English-speaking taxpayers who need help 

preparing their own tax returns. Go to 

IRS.gov/VITA, download the free IRS2Go 

app, or call 800-906-9887 for information 

on free tax return preparation.

• TCE. The Tax Counseling for the Elderly 

(TCE) program offers free tax help for all 

taxpayers, particularly those who are 60 

years of age and older. TCE volunteers 

specialize in answering questions about 

pensions and retirement-related issues 

unique to seniors. Go to IRS.gov/TCE or 

download the free IRS2Go app for information on free tax return preparation.

• MilTax. Members of the U.S. Armed 

Forces and qualified veterans may use MilTax, a free tax service offered by the Department of Defense through Military OneSource. For more information, go to 

MilitaryOneSource (MilitaryOneSource.mil/

MilTax).

Also, the IRS offers Free Fillable Forms, 

which can be completed online and then 

e-filed regardless of income.

Using online tools to help prepare your return. Go to IRS.gov/Tools for the following.

• The Earned Income Tax Credit Assistant 

(IRS.gov/EITCAssistant) determines if 

you’re eligible for the earned income credit 

(EIC).

• The Online EIN Application (IRS.gov/EIN) 

helps you get an employer identification 

number (EIN) at no cost.

• The Tax Withholding Estimator (IRS.gov/

W4App) makes it easier for you to estimate 

the federal income tax you want your employer to withhold from your paycheck. 

This is tax withholding. See how your withholding affects your refund, take-home pay, 

or tax due.

• The First-Time Homebuyer Credit Account 

Look-up (IRS.gov/HomeBuyer) tool provides information on your repayments and 

account balance.

• The Sales Tax Deduction Calculator 

(IRS.gov/SalesTax) figures the amount you 

can claim if you itemize deductions on 

Schedule A (Form 1040).

Getting answers to your tax questions. On IRS.gov, you can get 

up-to-date information on current 

events and changes in tax law.

• IRS.gov/Help: A variety of tools to help you 

get answers to some of the most common 

tax questions.

• IRS.gov/ITA: The Interactive Tax Assistant, 

a tool that will ask you questions and, 

based on your input, provide answers on a 

number of tax topics.

• IRS.gov/Forms: Find forms, instructions, 

and publications. You will find details on 

the most recent tax changes and interactive links to help you find answers to your 

questions.

• You may also be able to access tax information in your e-filing software.

Need someone to prepare your tax return? 

There are various types of tax return preparers, 

including enrolled agents, certified public accountants (CPAs), accountants, and many others who don’t have professional credentials. If 

you choose to have someone prepare your tax 

return, choose that preparer wisely. A paid tax 

preparer is:

• Primarily responsible for the overall substantive accuracy of your return,

• Required to sign the return, and

• Required to include their preparer tax identification number (PTIN).

Although the tax preparer always signs 

the return, you're ultimately responsible 

for providing all the information required for the preparer to accurately prepare 

your return and for the accuracy of every item 

reported on the return. Anyone paid to prepare 

tax returns for others should have a thorough 

understanding of tax matters. For more information on how to choose a tax preparer, go to Tips 

for Choosing a Tax Preparer on IRS.gov.

Employers can register to use Business 

Services Online. The Social Security Administration (SSA) offers online service at SSA.gov/

employer for fast, free, and secure W-2 filing options to CPAs, accountants, enrolled agents, 

and individuals who process Form W-2, Wage 

and Tax Statement, and Form W-2c, Corrected 

Wage and Tax Statement.

IRS social media. Go to IRS.gov/SocialMedia 

to see the various social media tools the IRS 

uses to share the latest information on tax 

changes, scam alerts, initiatives, products, and 

services. At the IRS, privacy and security are 

our highest priority. We use these tools to share 

public information with you. Don’t post your social security number (SSN) or other confidential 

information on social media sites. Always protect your identity when using any social networking site.

The following IRS YouTube channels provide 

short, informative videos on various tax-related 

topics in English, Spanish, and ASL.

• Youtube.com/irsvideos.

• Youtube.com/irsvideosmultilingua.

• Youtube.com/irsvideosASL.

Watching IRS videos. The IRS Video portal 

(IRSVideos.gov) contains video and audio presentations for individuals, small businesses, 

and tax professionals.

Online tax information in other languages. 

You can find information on IRS.gov/

MyLanguage if English isn’t your native language.

CAUTION

!

Free Over-the-Phone Interpreter (OPI) Service. The IRS is committed to serving taxpayers 

with limited-English proficiency (LEP) by offering OPI services. The OPI Service is a federally 

funded program and is available at Taxpayer 

Assistance Centers (TACs), most IRS offices, 

and every VITA/TCE tax return site. The OPI 

Service is accessible in more than 350 languages.

Accessibility Helpline available for taxpayers with disabilities. Taxpayers who need information about accessibility services can call 

833-690-0598. The Accessibility Helpline can 

answer questions related to current and future 

accessibility products and services available in 

alternative media formats (for example, braille, 

large print, audio, etc.). The Accessibility Helpline does not have access to your IRS account. 

For help with tax law, refunds, or account-related issues, go to IRS.gov/LetUsHelp.

Note. Form 9000, Alternative Media Preference, or Form 9000(SP) allows you to elect to 

receive certain types of written correspondence 

in the following formats.

• Standard Print.

• Large Print.

• Braille.

• Audio (MP3).

• Plain Text File (TXT).

• Braille Ready File (BRF).

Disasters. Go to IRS.gov/DisasterRelief to review the available disaster tax relief.

Getting tax forms and publications. Go to 

IRS.gov/Forms to view, download, or print all 

the forms, instructions, and publications you 

may need. Or, you can go to IRS.gov/

OrderForms to place an order.

Getting tax publications and instructions in 

eBook format. Download and view most tax 

publications and instructions (including the Instructions for Form 1040) on mobile devices as 

eBooks at IRS.gov/eBooks.

IRS eBooks have been tested using Apple's 

iBooks for iPad. Our eBooks haven’t been tested on other dedicated eBook readers, and 

eBook functionality may not operate as intended.

Access your online account (individual taxpayers only). Go to IRS.gov/Account to securely access information about your federal tax 

account.

• View the amount you owe and a breakdown by tax year.

• See payment plan details or apply for a 

new payment plan.

• Make a payment or view 5 years of payment history and any pending or scheduled payments.

• Access your tax records, including key 

data from your most recent tax return, and 

transcripts.

• View digital copies of select notices from 

the IRS.

• Approve or reject authorization requests 

from tax professionals.

Publication 1212 (January 2024) 15
• View your address on file or manage your 

communication preferences.

Get a transcript of your return. With an online account, you can access a variety of information to help you during the filing season. You 

can get a transcript, review your most recently 

filed tax return, and get your adjusted gross income. Create or access your online account at 

IRS.gov/Account.

Tax Pro Account. This tool lets your tax professional submit an authorization request to access your individual taxpayer IRS online account. For more information, go to IRS.gov/

TaxProAccount.

Using direct deposit. The safest and easiest 

way to receive a tax refund is to e-file and 

choose direct deposit, which securely and electronically transfers your refund directly into your 

financial account. Direct deposit also avoids the 

possibility that your check could be lost, stolen, 

destroyed, or returned undeliverable to the IRS. 

Eight in 10 taxpayers use direct deposit to receive their refunds. If you don’t have a bank account, go to IRS.gov/DirectDeposit for more information on where to find a bank or credit 

union that can open an account online.

Reporting and resolving your tax-related 

identity theft issues. 

• Tax-related identity theft happens when 

someone steals your personal information 

to commit tax fraud. Your taxes can be affected if your SSN is used to file a fraudulent return or to claim a refund or credit.

• The IRS doesn’t initiate contact with taxpayers by email, text messages (including 

shortened links), telephone calls, or social 

media channels to request or verify personal or financial information. This includes 

requests for personal identification numbers (PINs), passwords, or similar information for credit cards, banks, or other financial accounts.

• Go to IRS.gov/IdentityTheft, the IRS Identity Theft Central webpage, for information 

on identity theft and data security protection for taxpayers, tax professionals, and 

businesses. If your SSN has been lost or 

stolen or you suspect you’re a victim of 

tax-related identity theft, you can learn 

what steps you should take.

• Get an Identity Protection PIN (IP PIN). IP 

PINs are six-digit numbers assigned to taxpayers to help prevent the misuse of their 

SSNs on fraudulent federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return 

with your SSN. To learn more, go to 

IRS.gov/IPPIN.

Ways to check on the status of your refund. 

• Go to IRS.gov/Refunds.

• Download the official IRS2Go app to your 

mobile device to check your refund status.

• Call the automated refund hotline at 

800-829-1954.

The IRS can’t issue refunds before 

mid-February for returns that claimed 

the EIC or the additional child tax credit 

(ACTC). This applies to the entire refund, not 

just the portion associated with these credits.

Making a tax payment. Payments of U.S. tax 

must be remitted to the IRS in U.S. dollars. 

Digital assets are not accepted. Go to IRS.gov/

Payments for information on how to make a payment using any of the following options.

• IRS Direct Pay: Pay your individual tax bill 

or estimated tax payment directly from your 

checking or savings account at no cost to 

you.

• Debit Card, Credit Card, or Digital Wallet: 

Choose an approved payment processor 

to pay online or by phone.

• Electronic Funds Withdrawal: Schedule a 

payment when filing your federal taxes using tax return preparation software or 

through a tax professional.

• Electronic Federal Tax Payment System: 

Best option for businesses. Enrollment is 

required.

• Check or Money Order: Mail your payment 

to the address listed on the notice or instructions.

• Cash: You may be able to pay your taxes 

with cash at a participating retail store.

• Same-Day Wire: You may be able to do 

same-day wire from your financial institution. Contact your financial institution for 

availability, cost, and time frames.

Note. The IRS uses the latest encryption 

technology to ensure that the electronic payments you make online, by phone, or from a 

mobile device using the IRS2Go app are safe 

and secure. Paying electronically is quick, easy, 

and faster than mailing in a check or money order.

What if I can’t pay now? Go to IRS.gov/

Payments for more information about your options.

• Apply for an online payment agreement 

(IRS.gov/OPA) to meet your tax obligation 

in monthly installments if you can’t pay 

your taxes in full today. Once you complete 

the online process, you will receive immediate notification of whether your agreement has been approved.

• Use the Offer in Compromise Pre-Qualifier 

to see if you can settle your tax debt for 

less than the full amount you owe. For 

more information on the Offer in Compromise program, go to IRS.gov/OIC.

Filing an amended return. Go to IRS.gov/

Form1040X for information and updates.

Checking the status of your amended return. Go to IRS.gov/WMAR to track the status 

of Form 1040-X amended returns.

It can take up to 3 weeks from the date 

you filed your amended return for it to 

show up in our system, and processing 

it can take up to 16 weeks.

Understanding an IRS notice or letter 

you’ve received. Go to IRS.gov/Notices to find 

CAUTION

!

CAUTION

!

additional information about responding to an 

IRS notice or letter.

Responding to an IRS notice or letter. You 

can now upload responses to all notices and 

letters using the Document Upload Tool. For notices that require additional action, taxpayers 

will be redirected appropriately on IRS.gov to 

take further action. To learn more about the tool 

go to IRS.gov/Upload.

Note. You can use Schedule LEP (Form 

1040), Request for Change in Language Preference, to state a preference to receive notices, 

letters, or other written communications from 

the IRS in an alternative language. You may not 

immediately receive written communications in 

the requested language. The IRS’s commitment 

to LEP taxpayers is part of a multi-year timeline 

that began providing translations in 2023. You 

will continue to receive communications, including notices and letters, in English until they are 

translated to your preferred language.

Contacting your local TAC. Keep in mind, 

many questions can be answered on IRS.gov 

without visiting a TAC. Go to IRS.gov/LetUsHelp 

for the topics people ask about most. If you still 

need help, TACs provide tax help when a tax issue can’t be handled online or by phone. All 

TACs now provide service by appointment, so 

you’ll know in advance that you can get the 

service you need without long wait times. Before you visit, go to IRS.gov/TACLocator to find 

the nearest TAC and to check hours, available 

services, and appointment options. Or, on the 

IRS2Go app, under the Stay Connected tab, 

choose the Contact Us option and click on “Local Offices.”

The Taxpayer Advocate 

Service (TAS) Is Here To 

Help You

What Is TAS?

TAS is an independent organization within the 

IRS that helps taxpayers and protects taxpayer 

rights. TAS strives to ensure that every taxpayer 

is treated fairly and that you know and understand your rights under the Taxpayer Bill of 

Rights.

How Can You Learn About Your 

Taxpayer Rights?

The Taxpayer Bill of Rights describes 10 basic 

rights that all taxpayers have when dealing with 

the IRS. Go to TaxpayerAdvocate.IRS.gov to 

help you understand what these rights mean to 

you and how they apply. These are your rights. 

Know them. Use them.

What Can TAS Do for You?

TAS can help you resolve problems that you 

can’t resolve with the IRS. And their service is 

free. If you qualify for their assistance, you will 

be assigned to one advocate who will work with 

16 Publication 1212 (January 2024)
you throughout the process and will do everything possible to resolve your issue. TAS can 

help you if:

• Your problem is causing financial difficulty 

for you, your family, or your business;

• You face (or your business is facing) an immediate threat of adverse action; or

• You’ve tried repeatedly to contact the IRS 

but no one has responded, or the IRS 

hasn’t responded by the date promised.

How Can You Reach TAS?

TAS has offices in every state, the District of 

Columbia, and Puerto Rico. To find your advocate’s number:

• Go to TaxpayerAdvocate.IRS.gov/ContactUs;

• Download Pub. 1546, The Taxpayer Advocate Service Is Your Voice at the IRS, available at IRS.gov/pub/irs-pdf/p1546.pdf;

• Call the IRS toll free at 800-TAX-FORM 

(800-829-3676) to order a copy of Pub. 

1546;

• Check your local directory; or

• Call TAS toll free at 877-777-4778.

How Else Does TAS Help 

Taxpayers?

TAS works to resolve large-scale problems that 

affect many taxpayers. If you know of one of 

these broad issues, report it to TAS at IRS.gov/

SAMS. Be sure to not include any personal taxpayer information.

Low Income Taxpayer Clinics 

(LITCs)

LITCs are independent from the IRS and TAS. 

LITCs represent individuals whose income is 

below a certain level and who need to resolve 

tax problems with the IRS. LITCs can represent 

taxpayers in audits, appeals, and tax collection 

disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a 

second language. Services are offered for free 

or a small fee. For more information or to find an 

LITC near you, go to the LITC page at 

TaxpayerAdvocate.IRS.gov/LITC or see IRS 

Pub. 4134, Low Income Taxpayer Clinic List, at 

IRS.gov/pub/irs-pdf/4134.pdf.

Publication 1212 (January 2024) 17
To help us develop a more useful index, please let us know if you have ideas for index entries.

See “Comments and Suggestions” in the “Introduction” for the ways you can reach us. Index

A

Accrual period 2

Acquisition premium 2

Adjusted issue price 2

Assistance (See Tax help)

B

Backup withholding 5

Bearer bonds and coupons 5

Brokers (See Information for 

brokers and other middlemen)

C

Certificates of deposit 5

Contingent payment debt 

instruments 10

D

Debt instrument 2

Debt instruments:

Long-term 4

Short-term 4

Debt instruments and coupons 

purchased after 1984 13

Debt instruments and coupons 

purchased after July 1, 1982, 

and before 1985 13

Debt Instruments in the OID 

tables 3

Debt instruments issued after 

1984 8

Debt instruments issued after 

July 1, 1982, and before 

1985 8

Debt instruments not in the OID 

tables 3

Definitions 2

Accrual period 2

Acquisition premium 2

Adjusted issue price 2

Debt instrument 2

Issue price 3

Market discount 3

Original issue discount (OID) 2

Premium 3

Qualified stated interest 3

Stated redemption price at 

maturity 3

Yield to maturity 3

E

Electronic payee statements 4

F

Form 4

I

Inflation-indexed debt 

instruments 11

Information for brokers and other 

middlemen 3

Information for owners of OID 

debt instruments 5

Issue price 3

Issuers of OID debt instruments, 

Instructions for 2

L

Long-term debt instruments 4

M

Market discount 3

O

OID on long-term debt 

instruments, figuring 7

OID on stripped bonds and 

coupons, figuring 12

OID tables, Debt Instruments 

in 3

OID tables, Debt instruments not 

in 3

OID, figuring 4

Using section I 4

Using the income tax 

regulations 4

Original issue discount (OID) 2

Owners of OID debt instruments, 

information for 5

P

Premium 3

Publications (See Tax help)

Q

Qualified stated interest 3

R

REMIC and CDO information 

reporting requirements 2

S

Section I 3

Section II 3

Section III 3

Short-term obligations redeemed 

at maturity 4

Stated redemption price at 

maturity 3

Stripped bonds and coupons, 

figuring OID 12

T

Tax help 14

Y

Yield to maturity 3, 13

18 Publication 1212 (January 2024)