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posted Apr 7, 2021 11:00:28 AM

Can interest shortfall on contingent payment debt be greater than original issue discount?

TurboTax is asking me to review it.

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1 Replies
Level 9
Apr 8, 2021 2:49:34 PM

It depends.

 

This is a complicated calculation.  See IRS Section 1.1274-2.  The short long answer is most probably no, interest shortfall on contingent payment debt isn't usually greater than original issue discount.